Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — NATIONAL FINANCE

International Monetary Fund

Mr. H. Wilson: asked the Chancellor of the Exchequer if he is aware that, compared with pre-war, the volume of world trade has increased fourfold while the volume of national currencies required for financing world trade has increased by only 50 per cent.; and whether he will now propose to the Governing Body of the International Monetary Fund, first, that borrowing arrangements should extend to a first tranche of 40 per cent. of the basic quota, and, secondly, that quotas of national currency deposited with the fund should be regarded as ranking equal with gold for the calculation of national reserves of foreign exchange.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd): While I cannot accept the right hon. Gentleman's figures, I am aware that the average ratio of reserves to imports is lower now than it was in 1938. With regard to the second part of the Question, I would remind the right hon. Member that International Monetary Fund quotas were increased by 50 per cent. in 1959 and this had the effect of increasing the automatic drawing rights of members. In any case, members are not limited to the gold tranche but may borrow from the Fund on certain conditions up to the limit of their drawing rights. As regards the last part of the Question, it is for individual member countries to decide how to classify their own reserves.

Mr. Wilson: These suggestions were put forward in the debate on the Radcliffe Committee last year. Does not the right hon. and learned Gentleman feel

that with the problem that one year it is the French franc, another year sterling and the next year the dollar, there is a danger of exchange crises and even unemployment crises being exported from one country to another? Would he not welcome a further increase in the amount of liquidity in world trade?

Mr. Lloyd: I think that the point is not so much the amount of liquidity but whether the right use is made of the resources available. I am very conscious of the problem of imbalance to which the right hon. Gentleman has referred, and which, I think, is very dangerous.

National Debt (Interest)

Mr. H. Wilson: asked the Chancellor of the Exchequer if he will state the total cost to the Exchequer of the interest charged on the National Debt for the financial years 1950–51, 1954–55, 1959–60, and for the present financial year to date.

Mr. Selwyn Lloyd: As the Answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Wilson: Yes, Sir, we are not surprised. But would the right hon. and learned Gentleman confirm or not the figures in last week's Exchequer returns showing that in this financial year to date the total amount of interest charged on the National Debt has exceeded that in the period last year up to the same date by some £40 million, and is this not a very prodigal increase in the charge levied on the taxpayer?

Mr. Lloyd: Of course, it is costly to have high interest rates, but the point is that failure to have them might be very much more costly.

Mr. Wilson: But is it not a fact that in the last Budget we were told that the great disinflationary fact was the increase in the Tobacco Duty, Which was going to yield £40 million in a full year, and has not the whole of that amount already gone in interest on the National Debt?

Mr. Lloyd: That is an over-simplification. The point is that if one does not take this kind of difficult action at times one may cause much greater cost to the economy as a whole.

Following are the figures:


Year
Total cost of interest and management of National Debt
Interest met from receipts of interest on Exchequer loans to local authorities, nationalised industries and other borrowers
Interest and management met from revenue



£000
£000
£000


1950–51
514,886
37,059
477,827


1954–55
673,664
103,942
569,722


1959–60
858,296
243,560
614,736


1960–61 (to 3rd December, 1960)
609,985
180,547
429,438

Sources: Finance Accounts, 1950–51, 1954–55 and 1959–60; Exchequer Weekly Returns for week ending 3rd December, 1960.

Motor Car Industry (Hire-Purchase and Purchase Tax)

Mr. A. Henderson: asked the Chancellor of the Exchequer whether, in view of the recession in the motor car industry, he will consider the relaxation of hire-purchase restrictions and a lowering of the Purchase Tax on cars.

Mr. Selwyn Lloyd: I have nothing to add to the replies given on 17th November by my right hon. Friend the President of the Board of Trade relating to hire-purchase restrictions and by my hon. Friend the Economic Secretary to the Treasury relating to Purchase Tax on motor vehicles.

Mr. Henderson: Will not the Chancellor agree that the easing of the restrictions on hire-purchase might well tend to stimulate the home market for motor cars and thereby make a contribution to this very difficult situation?

Mr. Lloyd: I understand that there is to be a debate on these matters later this afternoon.

Local Authorities (Market Advances)

Mr. Wingfield Digby: asked the Chancellor of the Exchequer how many local authorities with populations below 10,000 received advances on the market in their own name and on their own credit in 1959–60.

Mr. Selwyn Lloyd: I regret that this information is not available.

Mr. Wingfield Digby: Is tit not a fact that very few of the smaller authorities can, in fact, borrow on the open market? Is that not the reason why out of £45 million advanced by the Public Works Loan Board last year only £2 million was not for the smaller authorities? Does not that show that there is inequality between the larger and the smaller authorities, and will not my right hon. Friend do something about it?

Mr. Lloyd: I am told that these smaller authorities can borrow on no worse terms than the larger authorities. My hon. Friend is quite right in his reference to the number of loans made last year, but they do not show that there is any difficulty about the smaller authorities getting money.

Mr. Jay: If the smaller authorities can borrow just as easily as the right hon. and learned Gentleman says, how does he explain the figures given by the hon. Member for Dorset, West (Mr. Wingfield Digby) which show, in fact, that they are not doing so?

Mr. Lloyd: The reason is because it is much more convenient to them to use the Public Works Loan Board.

British Forces, Germany (Support Costs)

Mr. Bence: asked the Chancellor of the Exchequer what was the cost of maintaining British troops in Western Germany in 1957, 1958, 1959, and 1960 to date; what was the corresponding German contribution covering the same periods; and what steps he is taking to reduce the British costs.

Mr. Selwyn Lloyd: As the Answer to the first two parts of the Question involves a number of figures, I will with permission circulate them in the OFFICIAL REPORT. My right hon. Friend the Minister of Defence and I are taking all practicable measures to keep these costs as low as possible in the circumstances.

Mr. Bence: Will the Chancellor give the House an assurance that, if the Americans succeed in getting the German Government to pay for the


American troops in Germany, the German Government should pay for the British troops there and the British taxpayers be relieved of the bill?

Mr. Lloyd: I could not find anything to quarrel with in that statement, as a general proposition. We are examining the whole question of the imbalance of payments, to which I referred recently, and I think that some form of sharing of defence costs is a matter which should be discussed.

Mr. H. Wilson: Has the right hon. and learned Gentleman seen the figures which the Financial Secretary gave ten days ago in respect of the net overseas military expenditure of the Government? In view of the very serious increase in those figures, will he treat this matter as one of urgency and report to the House when he has something to tell us?

Mr. Lloyd: I agree that one important factor in our balance of payments is the question of overseas military expenditure. I also agree that another disturbing matter is the imbalance of payments, and the way in which Western Germany is accumulating these large reserves and not pushing any Deutschmarks into the world economy. That is one matter which is relevant, and involved in that problem is the cost of the troops in Germany.

Following is the information:


FOREIGN EXCHANGE COST IN GERMANY OF MAINTAINING OUR TROOPS THERE


Year
Gross Cost
German Contribution
Net Cost



£m.
£m.
£m.


1957
63
41
22


1958
57
12
45


1959
51
24
27


1960 (first six months)
29
6
23

United States (Talks)

Mr. A. Lewis: asked the Chancellor of the Exchequer if he will make a statement on his recent talks with Mr. Robert Anderson, the United States Secretary of the Treasury, and Mr. Douglas Dillon, United States Secretary of State for Economic Affairs.

Mr. Selwyn Lloyd: I have nothing to add to my reply to the hon. Member for South Ayrshire (Mr. Emrys Hughes) on 29th November.

Mr. Lewis: Is the Chancellor aware that the American Treasury has always claimed that economic aid has been given, and will continue to be given, without any political or economic strings attached? Has his attention been drawn to the statement in The Times today, to the effect that the American Treasury is now issuing American aid on condition that it is not spent in Great Britain? Was that point discussed? If not, why not? What is the right hon. and learned Gentleman's reaction to it?

Mr. Lloyd: I am not aware of either of the propositions contained in the hon. Member's supplementary question.

Mr. Lewis: I will write to the Minister about it and show him.

Civil Servants (Scientific Classes)

Mr. Ginsburg: asked the Chancellor of the Exchequer when the investigation of Civil Service Scientific Salary Scales by the Pay Research Unit was initiated; and when he expects the report to be received.

Mr. Selwyn Lloyd: The Pay Research Unit began work on the survey of the scientific classes at the beginning of this year; the report should be available by the end of the year or early in 1961.

Mr. Ginsburg: I welcome this news, but would the Chancellor impress upon the Treasury the need for urgency? There is an acute shortage of scientists in the Civil Service. The Civil Service Commission is having great difficulty in recruitment. In the case of the assistant scientist grade an interim award was made in 1957, conditional upon an investigation by the Pay Research Unit, so that there has been a delay of four years.

Mr. Lloyd: I certainly agree that we want this report as soon as possible. It has been a fairly complicated task but, as I indicated, we hope to get the answer before long.

Western Germany (Economic Assistance)

Mr. Jay: asked the Chancellor of the Exchequer how much has been lent to Western Germany by the United Kingdom Government since 1945; and how much has been repaid.

Mr. Selwyn Lloyd: Economic assistance in kind furnished to West Germany by Her Majesty's Government in the early post-war years amounted to £201·8 million. It was agreed in 1953 that the Federal Government should repay £150 million of this sum over twenty years in full and final settlement. So far £82·5 million has been repaid.

Mr. Jay: If the German Government still owe us £120 million—[HON. MEMBERS: "No."]—I am sorry—£70 million, might not if be beneficial if this debt were repaid rather quicker? Has the Chancellor thought of approaching the German Government on this matter?

Mr. Lloyd: In fact, the next three payments have already been deposited in London.

Ford Motor Company, Dagenham

Mr. Lipton: asked the Chancellor of the Exchequer what communications he has received from the American Ford Company since his decision to sanction its purchase of the British Ford Company.

Mr. Selwyn Lloyd: I have had a letter from the Ford Motor Company stating that it is its intention to maintain close consultation with local authorities on the various types of local problems which may arise for those authorities out of the industrial plans of the Ford Companies. This arose out of a discussion with its representative, following upon a meeting which I had with the Mayor of Dagenham.

Mr. Lipton: Is not that dodging the issue? Apart from the unpatriotic decision to sell a valuable national asset, is the Chancellor aware that the United States Government are not favourably disposed to this deal? In these circumstances, is it right to make things more difficult for the new President, of whom many of us have high hopes? Why not scrap the whole thing, in the interests of Anglo-American relations?

Mr. Lloyd: As to the hon. Member's suggestion that I have been dodging the Question, I would point out that I answered the Question precisely. He asked what communications I had received, and I stated the only communication I had received. He has raised

another matter, which I expected to deal with in answer to another Question, but I can say that I have been in touch with Mr. Anderson, the American Secretary of the Treasury about this matter and, with his agreement, I am able to state that the United States Treasury has no intention of intervening in this transaction.

Mr. Ginsburg: asked the Chancellor of the Exchequer whether he will give an assurance that his permission for the sale of the Ford Motor Company will remain contingent upon the full payment being made in dollars.

Mr. Selwyn Lloyd: The Ford offer to the shareholders has been made in sterling, but it is an exchange control requirement that external sterling must be used for payment. External sterling can only be acquired by the sale across the official exchange of an acceptable currency, such as dollars. There is of course nothing to prevent the purchaser from using any external sterling balances which he already has at his disposal.

Mr. Ginsburg: While welcoming that assurance, may I ask the Chancellor to confirm that in previous transactions of this kind dollars have always been paid and that there has been no question of drawing on overseas balances?

Mr. Lloyd: I could not do that without notice.

Mr. H. Wilson: To put it beyond doubt, may we take the Chancellor's Answer as meaning that there can be no question of Fords borrowing money in this country or using Treasury bills or other investments they have in this country? Are we to understand that Fords would be free to use Deutschmarks for obtaining external sterling as well as by the sale of dollars?

Mr. Lloyd: They can do it in an acceptable currency and the acceptable currencies are gold, Deutschmarks, dollars or some of the other Western European currencies. Regarding the question of whether they are going to use balances, they would be able to use any sums they were about to transmit by way of dividends to the United States. My impression is that in fact this will be paid for by the purchase of sterling with dollars.

Service Departments (Requisitioned Land)

Mr. Ridley: asked the Chancellor of the Exchequer what rate of interest he instructs the Service Departments to pay on claims for compensation for compulsory purchase or dilapidations which are held up pending a settlement.

Mr. Selwyn Lloyd: When Departments enter on land before compensation for compulsory permanent acquisition has been paid, interest is added for the period before settlement at the rate of 6½ per cent. at present. In the quite different circumstances of a Department restoring possession of requisitioned land to an owner, compensation may be paid for the cost of making good any damage to the land and if settlement is delayed interest is added at the rate of 2 per cent.

National Theatre

Mr. Jeger: asked the Chancellor of the Exchequer whether he is now in a position to make a statement on the proposed National Theatre.

Dr. Stross: asked the Chancellor of the Exchequer how long the site on the South Bank has been available for the proposed National Theatre; and when he is to meet the representative body to discuss the new building.

Mr. Selwyn Lloyd: A site on the South Bank has been available since 1945. A deputation is coming to see me later this week. In other respects I have nothing to add to the reply given to the hon. Member for Stoke-on-Trent, Central (Dr. Stross) by my hon. Friend the Financial Secretary on 17th November.

Mr. Jeger: When the deputation visits the right hon. and learned Member, will he bear in mind the fact that April, 1964, is a very significant date, and that it is hoped that the National Theatre will be opened in that month, preferably on 23rd April? Since the right hon and learned Gentleman and his friends will then be looking for something to place to the credit of the Government, will he expedite the building of the National Theatre so that its completion will coincide with 1964?

Mr. Lloyd: I am aware of the significance of the date to which the hon. Member has referred.

Dr. Stross: Is the Chancellor aware that this site has been kept sterilised for this purpose for many years now? Is it not very unfair to ask the London County Council to hold on to it indefinitely? In his discussions will the Chancellor see that a decision is made forthwith?

Mr. Lloyd: I certainly think that it is time for a decision one way or the other to be made in this matter.

Sir P. Agnew: Before my right hon. and learned Friend receives a deputation, will he bear in mind the fact that there appears to be no appreciable shortage of theatre accommodation in London and that, by arrangement, one of the existing theatres could very well be designated as the National Theatre?

Richard Thomas and Baldwins

Mr. M. Foot: asked the Chancellor of the Exchequer whether, pending the Government's decision about the future of Richard Thomas and Baldwins, he will give a guarantee that he will forbid the purchase of any of the shares in the firm by foreign financial interests.

Mr. Selwyn Lloyd: Until the shares are saleable on the Stock Exchange the question of their purchase by foreign financial interests cannot arise.

Mr. Foot: In view of the fact that the Chancellor has been prepared to accept a situation in which large chunks of British industries have been sold off, cannot he give an absolute guarantee that this will not happen in the case of the publicly-owned part of the steel industry?

Mr. Lloyd: That is a hypothetical question. If the hon. Member is suggesting that while the shares remain in Government ownership there is any question of their being sold, I can reassure him on that point.

Miss Lee: May I ask the right hon. and learned Gentleman a question which is not hypothetical? Is he aware that the only reason why a foreign or a British investor could become interested in these shares is that this is an exceedingly well run and profitable firm? In these circumstances, does he realise that it would be legalised robbery to allow any foreign investors to take any part of it?

Mr. Lloyd: I could not disagree more with the hon. Lady. In my view, investment in other countries is very important and should be encouraged. By that I mean investment both by us in other countries and by other countries here.

Mr. Foot: Is the Chancellor saying that he is contemplating in any circumstances that part of this industry should be sold off to foreign interests?

Mr. Lloyd: That is why I said the question is hypothetical. We intend to denationalise the industry. Then the shares will be saleable on the Stock Exchange and the question might arise. As the hon. Member knows, at present there is no means whereby we can prevent private people from making transactions to acquire shares on the Stock Exchange. The Treasury comes in under exchange control regulations, in the case of a transaction of the kind we had in relation to Fords recently. The situation the hon. Gentleman is referring to is a hypothetical one, which I should deal with when the time came to deal with it.

Mr. Gresham Cooke: On a point of order. Mr. Speaker, I know that you are anxious, as always, to proceed with Questions, but I would draw your attention to the practice which seems to have grown up recently of hon. Members asking a kind of double supplementary question.

Mr. Speaker: Order. I hope that it will be convenient for the hon. Member to raise his point of order after Questions.

Mr. M. Foot: asked the Chancellor of the Exchequer whether, with a view to maintaining good labour relations, he will refrain from denationalising Richard Thomas and Baldwins.

Mr. Selwyn Lloyd: No, Sir.

Mr. Foot: Can the right hon. and learned Gentleman give one good reason why the denationalisation of this highly successful publicly-owned industry should be proceeded with? Is he aware that in the recent by-election in Ebbw Vale an overwhelming number of people who work in the industry voted against this piece of "legalised robbery," as my hon. Friend the Member for Cannock (Miss Lee) called it?

Mr. Lloyd: I do not think that there is one good reason why the industry should ever have been nationalised. We have fought three elections on these matters and we intend to carry out our decision. I do not accept, as the hon Gentleman suggested, that the workers in the concern are not in favour. But even were it so, I do not think that is the test, and I am certain that the hon. Member would not accept it were things the other way round.

Mr. H. Wilson: Since the Chancellor has said that, as long as it is in public hands it cannot be sold out to the Americans, but that if it were in private hands we could not stop it, is not that one good reason why it should remain in public control? Secondly, while disagreeing with my hon. Friends about the use of the words "legalised robbery", may I ask whether the right hon. and learned Gentleman is aware that if he sells this concern on the same humiliating terms as Staveleys and Llanelly, the robbery will not be legalised under Section 18 of the denationalisation Act: it will be "illegal" robbery?

Mr. Lloyd: I do not accept what the right hon. Gentleman said about the transaction, because the price was reasonable and fair value was obtained. I think the trouble comes from the original act of sin which was the nationalisation of the industry.

Bank Notes

Mr. Dempsey: asked the Chancellor of the Exchequer if, in view of the large variety of bank notes in circulation in the country, he will consult with the banks, and other appropriate interests, with a view to having a uniform bank note currency operating in the United Kingdom.

Mr. Selwyn Lloyd: No, Sir. I see no reason for interference with the existing arrangements. This was, also, the view of the Radcliffe Committee.

Mr. Dempsey: Is the Chancellor aware that to have twenty-seven different types of bank notes circulating in Scotland and in England is at the least anomalous if not ludicrous? Does not he agree that it would be in the interests of all to work for the standardisation of these bank


notes in both Scotland and England with a view to reducing the variety of those at present in circulation?

Mr. Lloyd: I do not think that uniformity is always an unmixed blessing. A certain variety is not necessarily a bad thing.

Mr. J. Wells: Is my right hon. and learned Friend aware that the variety of types of bank notes circulating in Scotland is a very important contributory factor to the relative infrequency of bank robberies in Scotland compared with England? In the interests of the safety of bank staffs and others, will my right hon. and learned Friend take no steps to alter the ancient rights of Scottish banks?

Mr. Lloyd: That point had not occurred to me and I am grateful to my hon. Friend for drawing my attention to it.

Post-war Credits

Lady Gammans: asked the Chancellor of the Exchequer if he will now include sufferers from multiple sclerosis in the categories of those eligible for post-war credits, in view of the short span of life left to many of them.

Mr. Selwyn Lloyd: I will bear my hon. Friend's proposals in mind but I am bound to say that there would be serious practical difficulties in doing as she suggests.

Lady Gammans: I thank my right hon. and learned Friend for that reply. Will he continue to bear in mind that it is now, and not at some time in the future, that these unfortunate people need their post-war credits?

Mr. Lloyd: I have very much sympathy with the point of view of my hon. Friend. The difficulty is that of singling out sufferers from one particular disease. That is the trouble.

Income Tax Returns (Grants and Subsidies)

Mr. W. Hamilton: asked the Chancellor of the Exchequer whether, in the interests of economy in public expenditure, he will take steps to ensure that everyone in receipt of grant or subsidy

of any kind shall include such grant or subsidy on his annual Income Tax return.

Mr. Selwyn Lloyd: No, Sir.

Mr. Hamilton: Can the right hon. and learned Gentleman give any good reason why this should not be the policy of the Government? For instance, is he aware that people in receipt of Family Allowances have always to return those allowances on their Income Tax returns? There is a serious and disturbed feeling among the members of the farming community at the charge that farmers get £250 million a year without any means test and that some of them who get a part of this could well do without it. Is the Chancellor aware that if they returned this money on their Income Tax returns that charge would be invalid?

Mr. Lloyd: I am not certain what is the suggestion of the hon. Member. Is it that such sums should be put on the Income Tax form with the intention that they should be taxed? If so, we are getting into a much wider argument than may be dealt with by question and answer.

Exports (Customs Procedure)

Mr. Peyton: asked the Chancellor of the Exchequer if he will conduct an overhaul of Customs procedure, particularly in relation to goods transported by air, in order to relieve exporters of the difficulties which arise from delays.

Mr. Selwyn Lloyd: The Customs procedures are kept under review. I am not aware of any general difficulties, but if my hon. Friend has any particular suggestions to make I shall be very pleased to consider them.

Mr. Peyton: I am obliged to my right hon. and learned Friend. Would he consider issuing a directive to those concerned that it is their duty to keep goods on the move with the minimum of delay and restriction? Would he bear in mind that irksome restrictions and delays will do a great deal to diminish the fun that is sometimes associated with exports?

Mr. Lloyd: I agree with my hon. Friend's proposition and I think that the Customs authorities would, too. It


would be helpful if any cases of unnecessary delay could be brought to my attention.

Assets, United Kingdom (Foreign Acquisition)

Mr. Swingler: asked the Chancellor of the Exchequer if he will state the extent to which British assets in the United Kingdom have been acquired by foreign interests in the last ten years, and Her Majesty's Government's general policy for maintaining effective powers to pursue full employment and economic expansion in the United Kingdom.

Mr. Selwyn Lloyd: Overseas private investment of a long-term nature in the United Kingdom since 1st January, 1952, is estimated at approximately £500 million. As regards the second part of the Question, overseas investment in British industry should improve the prospects of economic expansion and full employment in this country.

Mr. Swingler: That is not an answer to the Question. Will the Chancellor now say what proportion of the assets of the economy of the United Kingdom are held by people abroad, and to what extent there is a loss of power to control employment in this country, and what criteria the Treasury will apply to future applications which affect the power to maintain full employment in the United Kingdom?

Mr. Lloyd: I have given the hon. Member the figure of overseas private investment in this country since 1952 and it is a very minute proportion.

Mr. Nabarro: Would not my right hon. and learned Friend agree that as far as the £500 million of foreign money invested in this country in the last eight years is concerned, more than three times greater a sum of British funds has been invested in the Commonwealth and foreign countries in a comparable period?

Mr. Lloyd: My hon. Friend is quite right.

William Shakespeare

Dr. Stross: asked the Chancellor of the Exchequer whether he is aware of the plans of the London County Council to celebrate, in 1964, the birth of William Shakespeare, 400 years earlier, and that

these celebrations will include not only the City of London but the Commonwealth also; and if he will provide assistance to the London County Council, in view of the importance of this international occasion.

Mr. Selwyn Lloyd: I am aware of proposals for a Commonwealth Arts Festival in 1964 for which suggestions of rate and tax contribution have been mooted. I am not in a position to make any statement.

Dr. Stross: Is the Chancellor aware that the plans in mind include building an art gallery, a national theatre and a conference hall, that the total cost to be borne will be less than £5 million, and that this would make the South Bank one of the great cultural centres of the world? If the Chancellor cares about such things, and we all hope he does, will he take action when he is approached to see that such plans may be brought to a fruitful end?

Mr. Lloyd: I am certainly aware of the 1964 Festival and I have no doubt that very soon I shall be approached about the matter. Up to now I have had no specific approach with regard to it, but I will consider any suggestions put to me.

Dead Sea Scrolls

Mr. Fletcher: asked the Secretary to the Treasury whether Her Majesty's Government will make a grant to the trustees of the British Museum to enable them to contribute £25,000 to the Board of Trustees of the Palestine Museum, Jerusalem, in connection with the acquisition and preservation of the Dead Sea Scrolls, subject to certain of the scrolls being loaned to the British Museum for exhibition to the British public.

The Financial Secretary to the Treasury (Sir E. Boyle): No, Sir. It would not be appropriate for such a contribution to be borne on the Vote of the British Museum. If it were decided that Her Majesty's Government should participate in an arrangement to enable the Palestine Archaeological Museum to acquire Scrolls, on condition that certain of them would be loaned to the British Museum, payment would be made through the British Academy. As my right hon. and learned Friend's predecessor said on 26th July, the attitude of


Her Majesty's Government in this matter will depend upon the willingness of other countries concerned to co-operate financially and otherwise.

Mr. Fletcher: Will the hon. Gentleman bear in mind that, apart from their intrinsic value, these Scrolls are of the greatest importance to Western countries? Is it not highly desirable that Her Majesty's Government should be associated with the task of assisting the Jordanian Government to acquire any which can be acquired so that they can be examined and dealt with by international scholars of repute? In view of the urgency of the matter, will he consider Her Majesty's Government making an unconditional offer?

Sir E. Boyle: I do not think that I can go beyond the Answer which the former Chancellor gave at the end of July. The point is that we are prepared to make a special grant from the British Academy provided certain other countries, Sweden, France and the United States, come in with us and the Jordanian authorities agree to grant reasonable facilities for the periodical loan of these Scrolls to the participating countries. I think that a reasonable approach. I agree with the hon. Member that there is great public interest in this subject.

Departmental Letterheads (Telephone Numbers)

Mr. Shepherd: asked the Secretary to the Treasury why some Departments continue the practice of omitting the telephone number from their letterheads; if he is aware of the inconvenience this causes; and if he will make a statement.

Sir E. Boyle: So far as I am aware, Departments include their telephone numbers on their letter paper, except that used by Ministers and very senior officials. If the hon. Member knows of cases where the omission of a telephone number causes inconvenience, I suggest he brings them to the attention of the Ministers concerned.

Oral Answers to Questions — TRADE AND COMMERCE

North-West Durham

Mr. Ainsley: asked the President of the Board of Trade what new industry or extension has come, within the past

ten years, into the north-west Durham constituency, which is in a development area and is now scheduled under the Local Employment Act.

The Parliamentary Secretary to the Board of Trade (Mr. Niall Macpherson): In the period from 1st January, 1950, to the end of October, 1960, sixteen new industrial buildings and extensions, with a total of 166,000 sq. ft. of additional floor space, were completed in the area covered by the hon. Member's constituency, providing a total of 715 jobs. Two schemes at present under construction and five schemes which have been approved but on which building has not yet been started are expected to provide a further 259 jobs.

Mr. Ainsley: I am wondering if I represent that constituency. Is the Minister aware that, in the intervening period, three reasonably-sized coal mines have closed and the personnel in others have been reduced by 50 per cent., that two coking by-product plants have closed and two or three limestone quarries have closed and that the lead mines, from which the feldspar has been extracted, have closed and the only factories in the constituency are those which bear the name Hugh Dalton? Can the Minister give some idea when something is to be done for this constituency?

Mr. Macpherson: We are doing our best, and I can tell the hon. Member that in the next four years 580 jobs are in sight. This includes extensions as well as the new companies to which I have referred in my Answer.

Mr. Nabarro: Write to Alfred Robens.

Machine Tool Industry

Mr. Albu: asked the President of the Board of Trade what steps he has taken to carry out the recommendations of the Mitchell Committee on the machine tool industry, particularly in regard to standardisation, trials of electronically-controlled machine tools in Government establishments, and the siting of machine tool factories in development areas.

Mr. N. Macpherson: The recommendations are all being actively examined by the machine tool industry and the several Government Departments concerned.

Mr. Albu: Can the hon. Gentleman say whether the Government propose to take action to modernise this backward industry apart from subsidising the research association?

Mr. Macpherson: As I have said, this is primarily a matter for the industry itself and the report was made to the Machine Tool Advisory Council. Appropriate action in conjunction with Government Departments and other bodies such as the British Standards Institution is being taken.

Mr. H. Wilson: is it not a fact that this Report, interesting as it is, is largely a commentary on the Report by Professor Melman, but that we have not yet had the Melman Report published? Will the hon. Gentleman take this matter back and see if he cannot now publish that Report in some form, particularly as Professor Melman has gone on record as saying that the Mitchell Report has not dealt with this matter?

Mr. Macpherson: I shall certainly ask my right hon. Friend to consider what the right hon. Member has said about the possibility of publishing some form, perhaps an abridged form, of the Report.

Motor-car Industry (Exports)

Mr. A. Henderson: asked the President of the Board of Trade what steps he proposes to take to assist the motorcar industry to increase its export of cars to the under-developed countries of Africa and Asia.

The Minister of State, Board of Trade (Mr. F. J. Erroll): The export services of the Department are always fully available to the motor-car industry in its efforts to expand its exports to all markets including the under-developed countries of Africa and Asia.

Mr. Henderson: Would the right hon. Gentleman agree that these underdeveloped areas of Asia and Africa constitute a very large potential market for our motor-car industry? Is not this a problem of taking steps to work out same positive means of helping the greater export of our motor cars to these areas?

Mr. Erroll: Yes. We are doing quite well in both Africa and Asia, but their

ability to absorb British motor cars depends on the rate at which their standard of living rises.

Business Names and Companies (Registration)

Mr. Shepherd: asked the President of the Board of Trade if he will state the estimated annual loss suffered by his Department in respect of business names registration and company registration, respectively.

Mr. N. Macpherson: On business names registration it is estimated that in the last financial year there was a deficit of £19,000 and on companies registration there was a surplus of some £64,000.

Alfred Graham, Ltd., Spennymoor

Mr. Grey: asked the President of the Board of Trade if he will make a statement on the future of Alfred Graham, Limited, Industrial Estate, Spennymoor, having regard to the fact that the area is a development district under the Local Employment Act, 1960.

Mr. N. Macpherson: This firm is the tenant of the Industrial Estates Management Corporation at Spennymoor. It is for the firm itself, not the Board of Trade, to make statements about its future plans.

Mr. Grey: Is the Parliamentary Secretary aware of the concern felt in Spennymoor about this factory? It must be appreciated that Spennymoor itself is a development district and this factory came there a little less than twelve months ago. Key workers were allowed thirteen houses by the local authority, for which the authority got no subsidy whatever. Will the hon. Gentleman make a statement to the effect that he would deprecate any movement of this factory because, if it is allowed to be moved, that would make a complete mockery of the Local Employment Act, 1960?

Mr. Macpherson: I know of no suggestion that this firm is moving from Spennymoor.

Lancashire Cotton Industry

Mr. C. Osborne: asked the President of the Board of Trade whether he is aware that cotton goods exports for October had fallen from 31 million lb.


in 1959 to 25 million lb. or square yards in 1960, whereas imports of grey cloth had increased from 43 million to 49 million square yards, and for the first 10 months of this year had risen from 363 million to 490 million square yards; and, in view of the fact that the Lancashire cotton industry received a grant last year of £30 million in order to assist it to increase exports, what action he is taking to ensure the best use of this money.

Mr. N. Macpherson: The purpose of the Government assistance to the cotton industry was to help to make the industry compact, efficient and fully competitive in export markets. Since the equipment of the industry is in its early stages, the full effects of the Government's assistance are not yet apparent, though there has already been a marked improvement in efficiency.

Mr. Osborne: Are there no new measures that Her Majesty's Government can take to get from the Lancashire cotton industry a real return to the taxpayer for the subsidy which was given? The only way we want that return is by exports. Can the hon. Gentleman do anything about it?

Mr. Macpherson: My right hon. Friend is meeting the Cotton Board and will consider what further steps can be taken to improve the export position.

Mr. J. T. Price: Could I assist the Parliamentary Secretary and his right hon. Friend by asking if the Parliamentary Secretary is aware that the £30 million granted out of taxpayers' money to re-equip and modernise the textile industry has been largely dissipated by repayments of surplus capital to previous shareholders, and that it has not gone where it was intended that it should go? Is he aware that, while we all welcome the temporary improvement in the cotton industry's record in recent months, we are by no means certain that any permanent contribution has been made to the re-equipment and modernisation of the textile industry in the ultimate sense?

Mr. Macpherson: I appreciate the attempts of the hon. Member to assist me, but in fact the £30 million was provided for a period of over five years and so far only £8·5 million has been spent.

Cinemas (Closure)

Mr. Swingler: asked the President of the Board of Trade the number of cinemas which have been closed in each of the last five years; and what proportion the total forms of the number of cinemas in operation five years ago.

Mr. N. Macpherson: The numbers for the years 1955 to 1959 are 93, 224, 216, 263 and 489 respectively. The total of 1,285 represents some 28 per cent. of the number of cinemas open at the 31st December, 1954. Forty-three new cinemas opened and 149 cinemas reopened in these five years, giving a net reduction overall of 24 per cent.

Mr. Swingler: While welcoming the fact that there has been some improvement in the cinema trade recently, may I ask if the Parliamentary Secretary is aware that these closures have obviously tended to confirm monopolistic tendencies in the proprietorship of the cinema trade of the country? What inquiries is the Board of Trade making into the monopolistic tendencies which are so much stronger?

Mr. Macpherson: That is an entirely different question. We have the industry very closely under review the entire time.

David Brown Corporation (U.S.S.R. Orders)

Mr. Albu: asked the President of the Board of Trade what facilities were provided by his Department to the David Brown Coporation to assist them to obtain orders from Russia worth £500,000 for their electronically-controlled gear-cutting machines.

Mr. Erroll: During the negotiations leading to the conclusion of this very satisfactory contract the Corporation sought and received advice from my Department and from the Commercial Department of the British Embassy in Moscow.

Mr. Albu: Is the Minister aware that the research work on which the control mechanism is based was carried out by the National Engineering Laboratory in East Kilbride, and can he say what royalties the Government will receive on the sale of these machines?

Mr. Erroll: I will look into that, but I should point out that that has no reference to the main Question.

Imported Toys (Safety Devices)

Mr. George Craddock: asked the President of the Board of Trade if, in the interests of consumer protection, he will introduce legislation to ensure that all dangerous toys imported from abroad are fitted with safety devices.

Mr. N. Macpherson: My right hon. Friend is considering with his right hon. Friend the Secretary of State for the Home Department what action to take on the recommendation bearing on this matter made in the interim Report of the Committee.

Mr. Craddock: While I thank the Minister for that reply, may I ask whether he is aware of the death of Carole Ann Wilkinson, of Harrogate, only four years old, who was killed by a plastic dart from a plastic blowpipe quite recently? Will he and his right hon. Friend the Home Secretary kindly speed up legislation to protect the youngsters of the United Kingdom?

Mr. Macpherson: Yes, Sir. I was aware of that, and I am sure that the whole House sympathises with that case. It would obviously be extremely difficult to guard against all the various hazards that could arise from toys of various kinds, but we are at the moment considering the recommendation of the Committee which has put in its interim Report to my right hon. Friend.

Trade with U.S.S.R.

Mr. G. M. Thomson: asked the President of the Board of Trade what requests he has received from the Institute of Directors regarding the setting up in Moscow of an office to assist British businessmen seeking trade with Russia; and what steps he will take to facilitate such a development.

Mr. Erroll: My right hon. Friend has not received any such request. He will, however, neglect no opportunity of reminding the Soviet authorities of Her Majesty's Government's view that the establishment by industry of an office or offices of this kind could make a substantial contribution to the development

of trade between the two countries. The Commercial Counsellor is of course giving all the help he can to visiting business men.

Mr. Thomson: Is the Minister aware that even the Institute of Directors occasionally has a good idea and that this seems to be a particularly useful one which resulted from a visit which it paid to the Soviet Union recently? Will the right hon. Gentleman do everything he can to encourage the setting up of such a service?

Mr. Erroll: Yes, it is a good idea. We thought of it before the Institute of Directors and raised it in Moscow during the negotiation of the Anglo-Russian Trade Agreement in the summer of 1959.

Mr. H. Wilson: While we congratulate the right hon. Gentleman on his initiative, may I ask whether he is aware that we put this to Mr. Mikoyan in 1947?

Hire-Purchase Companies (Control)

Mr. Lipton: asked the President of the Board of Trade whether he will introduce legislation to ensure stricter control of hire-purchase companies.

Mr. N. Macpherson: No, Sir.

Mr. Lipton: Has the hon. Gentleman heard of the proposed nation-wide credit-rating directory organised by a number of the leading hire-purchase organisations? Would not he agree that, with all this snooping and private exchange of information and other dubious practices of hire-purchase salesmanship, the time has come to clip the wings of these highly undesirable organisations?

Mr. Macpherson: There is a Question down later on the Order Paper with regard to that matter.

Weights and Measures

Mr. Darling: asked the President of the Board of Trade if he will introduce legislation to give him wider powers to prevent misrepresentation and false advertising of the qualities, constituents, and performance of consumer goods, on the lines of Clause 25 of the Weights and Measures Bill, which is designed to


give him power to prevent misrepresentation of measure and weight of goods.

Mr. N. Macpherson: My right hon. Friend will consider this matter in the light of any advice that he may receive from the Committee on Consumer Protection, when it presents its final report.

Mr. Darling: In view of the fact that the Government waited nine years to carry out the recommendations of the Hodgson Committee which covered only one side of this business, are we to take it that when the Molony Committee reports, its recommendations will not be put into effect for an equal period of time? Is the Parliamentary Secretary aware that most of this quality protection can be covered by simple Amendments to the Merchandise Marks Act without waiting for any advice?

Mr. Macpherson: Since there is a Committee, I think that it would be well to wait for its advice, and that it is not worth while to assume too rashly that it will take a very long time before that advice is implemented.

Oral Answers to Questions — PLANNING (MINISTER)

Mrs. Butler: asked the Prime Minister what consideration he has given to the appointment of a Minister of Planning.

The Prime Minister (Mr. Harold Macmillan): As I told the hon. Member on the 27th of October, it is doubtful whether any useful purpose would be served by such an appointment.

Mrs. Butler: Does the Prime Minister realise that, in the speculative building boom we are now entering, local planning authorities increasingly need the help of a positive planning policy from a Minister who is responsible for traffic movement and commercial and industrial locations as well as the present planning administration, and is he prepared to see the erosion of the green belts and the countryside, the increased traffic chaos and the urban congestion and disfigurement which will be quite inevitable unless the Government make a new and positive approach to the planning problem?

The Prime Minister: This is a question of whether a Minister of Planning should be appointed. I should have thought that it was the function of each Minister to indicate what planning is required in the sphere of his own Department and for the Cabinet collectively to co-ordinate the planning.

Mr. Gaitskell: Is the right hon. Gentleman aware that the problems of urban development, transport and industrial and commercial location are all intimately bound up together? Can he tell us how these problems can be solved without a much closer degree of continous co-ordination than is provided by an occasional Cabinet meeting?

The Prime Minister: I think that the right hon. Gentleman knows the working of Cabinet and Cabinet Committees, and I should have thought that the question is not one that is just resolved by appointing a new Minister.

Mr. Gaitskell: It is not resolved by appointing a new Minister, but is the Prime Minister aware that it cannot be resolved for the country as a whole unless someone or other in Whitehall is responsible for looking at this problem as a whole? Will he please consider this matter?

The Prime Minister: Of course, I will consider it. The question is a very wide one concerning a Minister of Planning in general without definition of economic planning, local government planning or any other kind of planning, and it seems to me that such a Minister would not be a valuable addition to our machinery of Government.

Mr. Chetwynd: Was there any special planning today which enabled us to reach the Prime Minister's Questions at exactly a quarter past three?

The Prime Minister: That is thanks to you, Mr. Speaker.

Oral Answers to Questions — NORTH ATLANTIC TREATY ORGANISATION (COUNCIL MEETING)

Mr. Wyatt: asked the Prime Minister whether, in view of the importance of the proposals recently made by General Norstad, he will himself attend the North Atlantic Treaty Organisation


Council meeting on 16th December; and if he will invite the Prime Ministers of the other North Atlantic Treaty Organisation Powers to do likewise.

Mr. Warbey: asked the Prime Minister whether he will attend the December meeting of the Council of the North Atlantic Treaty Organisation.

Mr. Healey: asked the Prime Minister whether he proposes to attend the meeting of the North Atlantic Treaty Organisation Council in December.

The Prime Minister: No, Sir. It is not proposed that heads of Government should attend this meeting.

Mr. Wyatt: Would it not be desirable, in view of the fact that General Norstad has suggested that nuclear weapons should not be used unless all N.A.T.O. Powers have an equal voice, and would not the Prime Minister give some indication of his view on this proposal and whether he thinks it is practicable to make the necessary consultations in the short time that may be available?

The Prime Minister: At the meeting there will, no doubt, be proposals put forward by General Norstad and, no doubt, proposals by the other Governments, but it has not been proposed that there should be a heads of Government meeting. I say quite frankly that I do not think that it would be very valuable to have a heads of Government meeting just a month before the new American President takes office.

Mr. Warbey: Will the Prime Minister see that whoever represents this country at the N.A.T.O. meeting emphatically knocks on the head the monstrous proposal to erect a military supra-State on the foundation of hydrogen bombs?

The Prime Minister: I think that what the hon. Gentleman has done is what he has so often done, and that is to set up something that does not exist and then knock it on the head.

Mr. Healey: If the Prime Minister does not propose to attend the Council meeting, and in view of his known interest in this topic, will he ensure that Her Majesty's Government table a proposal that the N.A.T.O. countries collectively should approach the Soviet Union

and its allies in the Warsaw Pact to study the control and reduction of arms and forces in an agreed area of Europe, as proposed by himself in a communiqué he signed with Mr. Khrushchev not very long ago?

The Prime Minister: That matter arises out of the general plans for better arrangements regarding Germany. We hold to our plans, but I do not think that it is necessarily suitable for this particular meeting of N.A.T.O.

Oral Answers to Questions — DR. ADENAUER

Mr. Mayhew: asked the Prime Minister if he will discuss with Dr. Adenauer, during his visit to this country, the problem of political control of nuclear weapons by the North Atlantic Treaty Organisation countries.

Mr. Warbey: asked the Prime Minister whether, in his forthcoming discussions with Dr. Adenauer, he will invite his support for a nuclear-free zone in Europe including both parts of Germany.

Mr. Zilliacus: asked the Prime Minister whether on the occasion of Dr. Adenauer's visit to Great Britain, he will draw his attention to the urgent need, in the interests of German unity as well as world peace, to recognise the demarcation line and de facto Polish-German frontier as the de jure western frontier of the Polish State.

The Prime Minister: As has already been announced, Dr. Adenauer has most unfortunately been compelled to put off his visit to the United Kingdom next week We very much hope that it may be possible to arrange another one in the not too distant future.

Mr. Mayhew: Is the Prime Minister aware that supporters of N.A.T.O. are often embarrassed by the rather rigid policies of the West German Government? When he meets Dr. Adenauer will he make it clear that, while a number of General Norstad's proposals are undoubtedly undesirable and unacceptable, they may give an opportunity to reach a better arrangement for political control over the use of nuclear weapons by the N.A.T.O. countries?

The Prime Minister: Of course, all the matters in the three Questions are important. I regret not having an opportunity of discussing these, among other questions, with the German Chanceilor at this time.

Mr. Warbey: When the Prime Minister meets Dr. Adenauer, will he give him a warning that the Western declarations in support of the people of West Berlin will be rendered invalid unless Dr. Adenauer is prepared to consider proposals which would make possible a reasonable settlement of the German problem as a whole?

The Prime Minister: That is a very wide question. If I may be quite frank, I do not think that I should be wise to follow the hon. Member's suggestion of diplomacy.

Mr. Zilliacus: Will the Prime Minister put on the agenda for the next meeting the question of recognising the present Polish frontier, in view of the great anxieties being caused by official German support for irredentist propaganda and the fact that this propaganda is mixed with threats of force and is accompanied by the rearming of Germany? It is creating great uneasiness not only in Poland but in Eastern Europe and among public opinion here.

The Prime Minister: I have nothing to add to the reply given to the hon. Member on 22nd June by my hon. Friend the then Joint Under-Secretary of State for Foreign Affairs, when he confirmed that the attitude of Her Majesty's Government to the final delimitation of the frontier between Germany and Poland is that it cannot be formalised until there is a peace settlement.

Oral Answers to Questions — UNITED KINGDOM AND UNITED STATES

Mr. Wyatt: asked the Prime Minister whether he will make a statement amplifying his recent official proposal that there should eventually be a merger between Great Britain and the United States of America.

The Prime Minister: I would refer the hon. Member to the reply which I gave to my hon. and gallant Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) on 1st December.

Mr. Wyatt: Why is the Prime Minister being so coy about this? Is it not quite obvious that he said something of this sort to somebody, or else a number of reputable journalists, including his noble Friend the Member for Berwick-upon-Tweed (Viscount Lambton), are grossly misinformed and are misleading the public? Why does he confide in American journalists and not in the House of Commons? He may have the germ of a very good idea. Could not we all hear about it instead of his thinking aloud at a tea party?

The Prime Minister: There is a very long tradition of private discussions in which privacy has been maintained with great care, in most of my experience. I very much prefer that reference should not be made to private discussions. Nevertheless, I do not impugn anybody's good faith. In case there is any misunderstanding, I will make it clear that I do not believe in the Atlantic Union, which has always been taken to mean a merger or a combination between the United Kingdom and the United States. Such a concept would mean leaving out not only the Commonwealth but also Europe, and would be wholly unacceptable. As I said on 1st December, I believe in working for continually closer co-operation in all these fields, between various nations or groups of nations of importance in the free world. I am bound to say that if we do not gradually move in that direction I think that our chances of winning this great struggle will be correspondingly reduced.

Viscount Lambton: Would my right hon. Friend please explain to the House the difference between thinking aloud and saying what you mean? Would he also comment upon the statement which was made by a Foreign Office spokesman in Rome that at this meeting to which I referred
Mr. Macmillan coined the term 'Atlantic Union' to describe a possible merger. He told Americans that nothing should stand in its way.
Another official said later that the Prime Minister was not necessarily thinking of now but of 1990 or maybe even later.

The Prime Minister: Answering the first part of the supplementary question, I still say—and this is a long tradition which most of us have enjoyed—that I


prefer that references are not made to private off-the-record meetings. If such reference is to be made, the value of such meetings becomes lost. I can only repeat what I have said: "Atlantic Union" has always been taken to mean a union between the United States and the United Kingdom. It is certainly not a new phrase and it is ridiculous to say that I coined the phrase, which was in a book written many years ago. For the reasons which I have given, it seems to me to be wholly contrary to this concept of the closer co-operation of Europe, the Commonwealth and the United States.

Mr. Gaitskell: It is very unsatisfactory that private conversations of this kind should be reported. Has the Prime Minister taken any steps to find out how the leakage or the misrepresentation occurred? Will he not comment on the supplementary question of his hon. Friend the Member for Berwick-upon-Tweed (Viscount Lambton) about the statement issued in Rome?

The Prime Minister: I know nothing about a statement issued in Rome. If it is said that I coined the phrase "Atlantic Union", I am afraid that the spokesman has made an obvious mistake. [HON. MEMBERS: "The Foreign Office."] Everybody knows that that phrase has been in use for years. Mistakes are made or people may be misreported.
The right hon. Member knows from his experience that if these private discussions take place, it is rare for them to be revealed. I think that they have a value and that talks of this sort are useful, and in my long experience I have found that the confidences given in these talks have been remarkably well kept by journalists all over the world.

Viscount Lambton: While thanking my right hon. Friend for the courtesy and circuity with which he has answered me today, may I ask whether—now that this conversation is no longer private—he would completely clear the matter up by saying that the question of the Atlantic Union was never discussed that afternoon?

The Prime Minister: No, Sir. I would not say anything of the kind. It would be ridiculous to say that, because

obviously it may have been mentioned by one of those present. But I have made it clear today, as I have always made it clear—and my hon. Friend and the House know this—that I believe that Europe, the United Kingdom, the Commonwealth and United States should in monetary matters, economic matters and defence matters and all their general policy work towards an ever-closer union. I know that it will take a long time, but I made a plea that we should not take action which prevented that gradual growth but should always have our eyes upon its ultimate attainment.

Mr. Gaitskell: Did the discussions to which the Prime Minister referred take place in Rome? Was it there that he had the discussion? Will he not look into this statement of his noble Friend the Member for Berwick-upon-Tweed (Viscount Lambton) that a Foreign Office spokesman said that the Prime Minister had coined the phrase "Atlantic Union"?

The Prime Minister: I will look into that point but I dealt with the wider point. The right hon. Gentleman knows as well as anyone from his experience that we have these discussions. I was trying to clear up a misunderstanding. I am sure that it was a misunderstanding and I do not think that it was ill will. Something was attributed to me by somebody, who may or may not have been present, which was incorrect. At any rate, I have now stated my position. I am not ashamed of it and I think it commands a certain amount of support on all sides of the House.

Oral Answers to Questions — NUCLEAR DETERRENT

Mr. Grimond: asked the Prime Minister what undertaking Her Majesty's Government have given to their allies as to previous consultation before threatening or using the United Kingdom nuclear deterrent.

The Prime Minister: Consultation is of course desirable and, in many circumstances, practicable. But, as I said in the House on 8th November, it is the absolute certainty of retaliation which deters aggression. We have therefore given no specific undertakings of the kind mentioned in the Question.

Mr. Grimond: Is it not rather curious that we should continually demand from the Americans specific undertakings? Did not the Prime Minister assure us that we have specific undertakings about Polaris and other matters, for instance? Does not the uncertainty about this whole question make it very urgent that we should make some proposal to the Western allies for some machinery to deal with the circumstances in which this weapon may be used and the control of weapons in general?

The Prime Minister: I think that the hon. Member slightly misunderstands the position. We have specific arrangements with the Americans in respect of the bomber bases becaues they are in this country. I explained when we were discussing Polaris, and the degree to which we had specific arrangements for submarines when they were in our country or the territorial waters, that we could not have quite the same specific arrangements if they were thousands of miles away, and that we must then rely on the general understanding which of course exists that nobody will fire this weapon without consultation with our allies—except that the aggressor must note that if he starts an attack of this kind it will have an immediate response from anybody who is in a position to make it.

Mr. Gaitskell: Is the Prime Minister aware that while it is indeed necessary to be sure that the deterrent is effective, there is certain danger and apprehension that in certain circumstances nuclear weapons might be used by one member of the alliance without the others being consulted? If he says, as he did, that in the ordinary way of course there would be consultation, will he please tell us what arrangements have been made to that end?

The Prime Minister: They are known to exist, because the circumstances we are trying to cover are of two quite separate kinds. One is the development of a bad position, possibly involving military action of a minor kind or even of a major kind, where there is time for consultation. The other is a sudden aggressive attack, and it must be absolutely clear to anyone contemplating such an attack that the reply to it would be immediate.

Mr. Speaker: Mr. Emrys Hughes.

Mr. Emrys Hughes: Question No. 45.

Mr. Speaker: Order. I am sorry, but it is after half-past three. I called the hon. Gentleman to ask a supplementary question and not Question No. 45.

Mr. Hughes: Is the right hon. Gentleman quite convinced that we have any control at all over the Polaris submarine when it gets out of territorial waters? Is he aware that there is a strong opinion in Scotland that we have no control, that this has brought this country into very grave danger, and that the idea that we have control over Polaris is an absolute delusion?

The Prime Minister: On several occasions in the House I have explained the exact position in great detail. I hardly think that it is possible for me to state again at this hour all the points which I have previously made. I have tried again today to remind the House of the different types of situation which exist in regard to the Polaris submarine.

EGYPT (COMPENSATION CLAIMS)

The following Question stood upon the Order Paper:

Mr. HIRST: To ask the Lord Privy Seal whether he will make a statement about the settlement of claims for property and other assets of British nationals taken over by the Egyptian Government.

The Lord Privy Seal (Mr. Edward Heath): With your permission, Mr. Speaker, and that of the House, I will now answer Question No. 91.
An Order in Council has been laid before the House today which makes certain technical amendments to the Foreign Compensation (Egypt) (Interim Distribution) Order, 1959, and sets out a new scale for the payment of compensation to those claimants whose property was taken over by the Egyptian Government or sequestrated by them. This Order supersedes the scale laid down in the 1959 Order and provides for increased payments to those whose claims exceed £10,000.
Under the new Order compensation will be paid at the following rates:

70 per cent. on the first £5,000 of each claim;
50 per cent. on the next £45,000 of each claim;
25 per cent. on the next £450,000 of each claim;
20 per cent. on all amounts over £500,000.

This new scale will benefit the middle and larger claimants who, under the original scale, received a much smaller percentage than those with claims below £10,000.

Mr. Hirst: I thank my right hon. Friend for that statement. It was absolutely right that small claimants should receive a substantial payment under the first Order, but is he aware that there was a strong feeling that the larger claimants—for example, the Bradford Dyers' Association—which received only 5½ per cent. under the earlier Order, were unjustly treated? Is he also aware that the new Order will go a long way to correct that position, that I welcome it, and hope that in due course a further payment will be made?

Mr. Warbey: Can the Minister say when people who have had their property desequestrated for over a year will receive the money which is due to them?

Mr. Heath: I am not clear whether the hon. Gentleman is referring to any moneys which they wish to bring out of Egypt, or whether it is the claim which they wish to make on the Foreign Compensation Commission.
As regards the latter, as soon as the claim for any damage or loss they have suffered through sequestration has been assessed and accepted by the Commission, it will be paid on the terms I have just announced.

Mr. Warbey: And the former?

Sir H. Legge-Bourke: I, too, welcome my right hon. Friend's statement. When this payment is made, what percentage of the total claim will still be unfulfilled?

Mr. Heath: I cannot give a precise percentage, or even a nearly accurate one, because the assessments on the

Egyptianisation claims are not yet completed and the claims for losses on desequestration are only just beginning to come in. It is not possible at this stage for me to give my hon. Friend a worth-while figure.

Mr. Manuel: In the light of what the right hon. Gentleman has said about the latest compensation payment, will he tell the House what the extent of the total bill now is arising out of the mistake of the Suez incident?

Mr. Heath: It is not yet possible to estimate the total bill for these claims—partly because the assessments of the Egyptianisation claims are not yet completed, through no fault of either the Foreign Compensation Commission or the claimants, and partly because the process of desequestration is still continuing.

POLICE PAY

The Secretary of State for the Home Department (Mr. R. A. Butler): With your permission, Mr. Speaker, I should like to make a statement about police pay.
As I told the House on 24th November, I referred the Report of the Royal Commission to the Police Council for Great Britain. At a meeting on 30th November the Council agreed to accept the scale of pay recommended for the police constable by the Royal Commission, and to bring it into operation from 1st September. The Council also agreed that scales of pay for the other ranks should be negotiated as soon as possible, and that they should in due course take effect from 1st September. The agreement also covered certain minor points with which I need not trouble the House.
While the Government fully appreciate the considerations which the Royal Commission had in mind, they do not accept all the reasoning and formulae by which the constable's scale was determined by the Commission and by which it recommended that future pay should be governed. However, the Government fully agree with the Commission that the continued increase in crime, the need to strengthen the police, and the reassessment of constables' duties together make it urgently necessary for there to be a very large increase in the pay of police constables relative to other members of


the community. The Government therefore welcome the prompt agreement that has been reached on the Police Council, which reflects great credit on both its sides.
I am laying draft Regulations giving effect to the agreement before a meeting of the statutory Police Council for England and Wales tomorrow, and I am asking the police authorities to bring the new scales into payment as soon as possible.
My right hon. Friend has asked me to say that similar action is being taken in Scotland.

Mr. Gaitskell: Is the right hon. Gentleman aware that the agreement of the Police Council to this increase in constables' pay will be generally approved throughout the House? How long will it take the Council to complete its negotiations on the pay of the other ranks?

Mr. Butler: I understand that there is to be a meeting on 5th January, and I hope that agreement will follow shortly after the meeting.

Mr. Grimond: I welcome the increase in police pay. Can the right hon. Gentleman say what effect it will have on police pensions?

Mr. Butler: I should want notice of that question.

Mr. J. T. Price: I do not disagree with the decision to increase police pay, but can the right hon. Gentleman tell us the approximate global cost of the increase and what proportion of it will fall on the Exchequer and what proportion will have to be met from rates?

Mr. Butler: The amount is approximately equally divided between local rates—that is, what the authorities will pay—and the Exchequer. We calculate that the cost to the Exchequer may be upwards of a figure rather below £10 million.

Miss Bacon: When the new scales come into operation, will the right hon. Gentleman consider promoting a great recruiting drive so that there will be sufficient numbers of men and women to ensure the greatest possible deterrent to the criminal, namely, the knowledge that he will be found out?

Mr. Butler: Yes, Sir. I am grateful to the hon. Lady for asking me that helpful question. We hope that police constables—and, later, the other ranks—will be the best recruiting officers after this very fine increase in their remuneration. We are also contemplating, with the aid of the police forces, a special drive on what I think is one of the most important matters of our time, namely, a stronger, more balanced and efficient police force.

Mr. Bence: I welcome this splendid increase in the pay of policemen, but has the right hon. Gentleman consulted his right hon. and learned Friend the Chancellor of the Exchequer to discover what the inflationary effect might be?

Mr. Butler: My right hon. and learned Friend, naturally, finds this a very considerable burden, as, indeed, will the taxpayer and the ratepayer. However, he was the first to agree with me about the great importance of the expenditure of this particular piece of money.

Mr. W. Hamilton: May I draw attention, Mr. Speaker, to a practice, slowly developing, of a Minister representing England making a statement and then saying that he speaks on behalf of the Secretary of State for Scotland, thereby precluding, or, at any rate, possibly reducing, the number of supplementary questions addressed by Scottish hon. Members to the Secretary of State? In view of the fact that the Scottish police are also involved, would it not be better for the Secretary of State for Scotland, too, to come to the Box, make a separate statement, and then be questioned by Scottish hon. Members?

Mr. Speaker: I understand the hon. Gentleman's difficulty, but the difficulty of the House as a whole is that it appoints its business and has to get through it. I know that more hon. Members want to speak today in the debate than will, in fact, get in, and the longer we prolong these preliminaries the less time there is to do the business of the day. That is the difficulty.
The hon. Member for Twickenham (Mr. Gresham Cooke) had a point of order. I see him no more, so I need not trouble the House about it.

BUSINESS OF THE HOUSE (SUPPLY)

Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. R. A. Butler.]

WELSH AFFAIRS

Report on Development and Government Action in Wales and Monmouthshire, 1959 (Command Paper No. 961), being a matter relating exclusively to Wales and Monmouthshire, referred to the Welsh Grand Committee for their consideration.—[Mr. H. Brooke.]

RESTRICTION OF OFFENSIVE WEAPONS ACT, 1959 (AMENDMENT)

3.41 p.m.

Mr. Barnett Janner: I beg to move,
That leave be given to bring in a Bill to amend the law in relation to exposing for sale of flick knives and other dangerous weapons.
I should like, first, to thank the House, and the many organisations and individuals throughout the country for the assistance which they gave in enabling my colleagues and myself to introduce the Bill that was ultimately passed as the Restriction of Offensive Weapons Act, 1959. It is quite clear now that that Act has succeeded in almost entirely removing the danger of use of flick knives—by young people, in particular.
It is not unusual, as the House knows, and as you would know, Mr. Speaker, that an interpretation by the courts of the meaning of certain words can make it necessary to amend the law so that a flaw that was not noticed at the time when an Act was passed can be removed. The Divisional Court, in the Queen's Bench Division on 10th November, came to an interesting decision in the case of Fisher v. Bell. The facts of this case were that a policeman walking past a retail shop in Bristol, saw a flick knife in the window with a ticket on it marked, "Ejector knife, 4s." He went into the shop and informed the shopkeeper that he would be reported for offering a flick knife for sale, and the shopkeeper replied, "Fair enough."
The question before the Divisional Court was whether the exhibiting of the knife in the shop window with a ticket behind it constituted an offer for sale within the meaning of Section 1 of the Restriction of Offensive Weapons Act, 1959. That Section reads:
Any person who manufactures, sells or hires or offers for sale or hire, or lends or gives to any other person—
(a) any knife which has a blade which opens automatically by hand pressure applied to a button, spring or other device in or attached to the handle of the knife, sometimes known as a 'flick knife' or 'flick gun' …
shall be guilty of an offence …


I cannot do better than read part of the report in The Times of 11th November, which said that the Lord Chief Justice
… confessed that when he first read these papers he was inclined to the view that to say that a knife displayed in a window like that, with the price attached to it, was not an offer for sale, was just nonsense. It was there inviting people to buy it, but any statute must of course be looked at in the light of the general law of the country and Parliament, in its wisdom in passing an Act"—
and here it must be collective wisdom, because the Bill was not opposed at any stage—
must be taken to have known how the law had interpreted certain words. It was clear that according to the ordinary law of contract the display of an article with the price upon it in a shop window was merely an invitation to treat, not an offer for sale, acceptance of which constituted a contract. That was the general law of the country. Not only that, but it was to be observed that in many statutes and orders which prohibited selling and offering goods for sale, it was very common to insert the words 'offering and exposing for sale', the words 'exposing for sale' covering the display of goods in shop windows. In several statutes, two of which had been cited to the Court, Parliament, when it desired to enlarge the ordinary meaning of those words included a definition section enlarging the ordinary meaning of 'offer for sale' to cover other matters, including the exposing of goods for sale with the price attached. In those circumstances his Lordship had been reluctantly driven to the conclusion that no offence was here committed.
It is generally thought, of course, that if an article for sale is put in a shop window with a price on it the retailer or the shopkeeper is bound to sell it to

the individual who comes in, but, in law, that is not the position. The shopkeeper is not bound to sell any article exposed in his window, strange though it may seem to the ordinary layman.
This, Sir, not being an offer for sale, I seek to put this omission right by a very short amending Bill which will require the insertion of only two or three words in the appropriate Section of the Act. It is interesting to note that the Weights and Measures Bill—a very compendious Bill—at present being dealt with in Committee in another place, is drafted without the insertion of similar words, and that Amendments have there been tabled to insert these words. It would appear from this that I am in very illustrious company indeed in having omitted the words from the original.

Question put and agreed to.

Bill ordered to be brought in by Mr. Janner, Mr. Sydney Irving, Mr. Eric Johnson, Mr. Bowen, Mr. Lipton, Sir Eric Errington, Mr. Iremonger, Mr. G. Jeger, Mr. Hoy, Mr. Prentice, and Miss Joan Vickers.

RESTRICTION OF OFFENSIVE WEAPONS ACT, 1959 (AMENDMENT)

Bill to amend the law in relation to exposing for sale of flick knives and other dangerous weapons, presented accordingly, and read the First time to be read a Second time upon Friday, 16th December and to be printed. [Bill 42.]

Orders of the Day — SUPPLY

[1ST ALLOTTED DAY]

Order for Committee read.

Motion made, and Question proposed, That Mr. Speaker do now leave the Chair.—[Mr. Redmayne.]

Orders of the Day — MOTOR INDUSTRY

3.48 p.m.

Mr. Frederick Lee: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House, gravely concerned at the present situation in the motor industry, deplores the Government policies which have materially contributed to these difficulties; and calls upon Her Majesty's Government to take immediate emergency action to relieve the unemployment and short-time working in the industry and to set up a national working party to consider the future of the industry.
The House will note that in our Amendment we try to look at the position of the motor car industry both in the short term and in the long term. We do not believe that with the position as it now is we can hope to get back to a healthy industry merely by what can only be short-term palliatives. We therefore suggest certain methods, by which, first, we deal with the short-term issue, and then, in discussing the setting up of a national working party, we look more to the long-term future of the industry.
Our idea of such a national working party would be one on which both employers and trade unions in the motor industry would be represented, plus a number of Government sponsored nominees acceptable to both sides who would, perhaps, be able to look both at and beyond the industry itself. I believe that, for this purpose, we should require people who could view the industry as an important component of our economy and of our general industrial effort.
It is difficult to define the projects with which such a working party would grapple, but, in the main, one would think that it could review such vital matters as productive levels, the effect of the rate of expansion on the capital

programmes of others, export possibilities, with suggestions for methods of co-operation within the industry in export markets, with, perhaps, special reference to standardisation and the type of model most suitable for certain markets, and it would do what it could to eliminate the boom and slump conditions which we have seen in the industry during the past few years.
These, we suggest, are some of the vital problems which now face the car industry and those who work in it. Our suggestion would be that those who have a direct interest in the matter, and others who can survey the things, perhaps, more from the standpoint of the national interest itself, should have the opportunity of advising the industry and the country on its future.
This may well be the first of several debates about industries the performance of which the House may wish to examine. One has in mind such industries as aircraft construction, shipbuilding, machine tool manufacture—industries of that kind which at the moment are certainly not doing well and might profit from discussion in public about their affairs.
Perhaps the first thing we should remember when considering the motor car industry is that it is no longer a secondary or marginal industry at all. Its performance is important as a key to our balance of payments, our reserves and matters of that kind. I was looking recently at the Motor Industry Bulletin of July, 1960, and the quotation of a few facts from it will, I think, give an idea on the importance of the industry. It is there reported as follows:
Since the war a spectacular rise has taken place in the volume of the industry's exports. Whereas, in 1938, 84,000 cars and commercial vehicles valued at £11 million were exported, the figures for 1959 stood at 697,000 units, valued at £310 million. The total value of all products exported by the industry in 1938 amounted to £19 million, whereas in 1959 the industry achieved the all-time record figure of almost £550 million, representing 16 per cent. of Britain's total visible export earnings for that year.
It is, therefore, a vital industry, especially when we are in trouble with our balance of payments.
In the industry at present roughly one-quarter, or 100,000, of the labour


force are on short-time working, and a a few thousand people have been dismissed. In addition to the car industry itself, there are at least 1,000 firms in ancillary industries which are now slackening off, the workers in which are losing jobs or going on short-time, as a consequence of the slack now present in the car industry.
In those areas in which an appreciable proportion of industry is connected in any way with the car industry, we see the old familiar vicious circle of lack of purchasing power affecting retail trades. Indeed, it may well go beyond that shortly. I recall pointing out during the debate on Richard Thomas and Baldwins on 27th June this year that the failure of the Steel Board to carry the private steel owners in accepting the need to produce a new strip mill had resulted in a huge rise in imports of sheet steel mainly for the car industry. I know that because of the slack in the car industry now, sheet steel imports are tapering off and the balance of payments is that much better; but I suggest that if the tendency continues much longer there may well be an effect, a recession, as it were, in some parts of our own steel industry.
We will not try to dispute that there are times when, for reasons completely outside the control of any particular industry or, indeed, of the Government themselves, there is a falling away in trade and, consequently, in employment. That kind of thing can happen in any industry. But we submit that this is not the case in regard to the car industry. World demand for cars now is probably greater than ever. At home, demand has been artificially restricted by Government policy. We suggest that it is thy job of the House to decide whether or not that policy is right.
The main lines of Government economic policy are high interest rates, a squeeze on credit, and restrictions on hire purchase. The reasons given include the necessity to divert products from the home market to export markets. If those policies, which my right hon. and hon. Friends have opposed for a long time, are, indeed, the key to increased exports from this country, why is our export performance as a whole so very disappointing? The monthly figures show that exporting seems to be

becoming less fun with every day that passes. Two weeks ago, we discussed the unsatisfactory investment record in both the private and the public sectors of our industry. We suggested then, and we repeat now, that until the Government pay far more attention to the need for modernisation and efficiency, policies such as those in which they insist upon indulging are really quite irrelevant to the problems facing the nation.
In any event, what is the criterion which the Government apply in deciding the timing of the policies of restriction which we have witnessed on and off during their period of office? I shall be quite blunt about it. I believe that their policies are based far more on the dates of General Elections than on economic situations at any given time. We had hoped that, following the recession of 1956, which, as we all remember, came about as a result of preparation for the 1955 General Election and during which 50,000 jobs were lost in the car industry, circumstances would have evoked from the Government a more responsible attitude. But we again found that the desire to promote the "Never had it so good" atmosphere for the 1959 election proved too strong for them. From September, 1958, when the restrictions were relaxed, until April, 1960, when they were reimposed, the total hire-purchase debt in this country rose from £480 million to £920 million. It is now about £945 million. Of course, a very large proportion of that was in respect of deals in motor cars.
It is no exaggeration to assert that the modern hire-purchase system in Britain has grown to its present proportions on car purchase deals, with other consumer durable industries adapting themselves to it.
It follows that, without the hire-purchase system, the motor car industry would not have grown to anything like its present wide dimensions. It certainly could not possibly have grown so rapidly. Therefore, movements to restrict hire purchase must inevitably affect the car industry more drastically than any other major industry. Hire purchase in the car industry is by no means a delicate instrument. It is more in the nature of a particularly heavy sledge hammer.
I have very mixed feelings about the advisability of basing any of our vital


industries on this form of purchase. I do not advocate that we should base industry on it. I merely state as a fact that the car industry is based on the hire-purchase system. It follows, therefore, that stimulation of the home market depends in a very large measure on the relaxation of hire-purchase restrictions. It has been suggested that the two-year period for repayment should be extended to three years. It may well be that that would be of assistance to the industry.
What I want to ask the Government is: what is the object of these restrictions? Does the President of the Board of Trade really believe that the lifting of restrictions now would drag more cars on to the home market from the export trade? Surely the fact is that the industry cannot sell those which it already has on offer in the home market. Could it he that the Government are afraid that the result of these cars being let loose on what the Minister of Transport is pleased to call the British road system would be disastrous and that it would not be safe to take off the restrictions because of the casualties that may cause on the roads? If so, it is an indictment of the Minister of Transport, who has failed dismally to give us a decent road system. The result is that cars are now rotting in the fields of the Midlands and men are losing their jobs.
In the Economist of 3rd December there was this passage:
It is not really likely now that a relaxation of the H.P restrictions would divert many British motor cars from export markets to home consumption. Its larger effect would be to divert some motor car workers from sitting at home on Fridays and Mondays to doing productive work in the factories.
I should have thought that that should be the object of the exorcise.
I said that I am not enamoured of the prospect of basing great industries on hire purchase, but it is a fact that millions of people who are able to enjoy family cars, television sets, refrigerators, and that kind of thing, to brighten their lives, would have had to do without them if hire purchase had not been possible. I believe that the great principle, above all others, which is essential to the needs of people with large hire-purchase debts is security. Without security the system becomes a nightmare to those who borrow and to those who lend.
To rely entirely, as the Government do, on the turning on and off of the hire-purchase credit tap is to convert the car industry and similar industries into seasonal ones, with boom and depression for those employed in them and had debts for those who take their products. Perhaps the greatest measure of the Government's failure is best exemplified by the announcement that seven of our leading finance houses are proposing to set up a nation-wide credit rating system, including a black list of bad risks. I shall be surprised if the Government are not at the top of the black list.
I understand that in Manchester cars bought on hire purchase are being abandoned because the owners cannot meet their payments. I read that one finance company in the area has recovered 150 cars during the last three weeks. If that is going on in Manchester it must be going on elsewhere. What Manchester thinks of today probably London and other cities will think of very shortly.
I now turn to the question of Purchase Tax. A tax of 50 per cent. on motor cars places them in the heaviest rate of tax. I am told that it is 20 per cent. higher than the average tax imposed on the Continent. It is believed by the trade that a reduction to 40 per cent. would probably increase sales of cars by perhaps 100,000 a year.
I ask the Government to examine this matter for another reason. There is a feeling that there is bound to be a reduction in Purchase Tax in the Budget.

Mr. Gerald Nabarro: Hear, hear.

Mr. Lee: That being so, one cannot very well blame potential buyers if they wait for the Budget and, in so doing, aggravate the already very difficult position in the industry. The very great success of the commercial section of the industry, for whose products there are still very long waiting lists and which is free of Purchase Tax, suggests that with a diminution of Purchase Tax in the car section we may well see, not a performance as successful as that of the commercial side perhaps, but certainly an improvement in the present position.
I read that the British Motor Corporation is threatening to increase prices. We on this side have for long argued that


to restrict production increases unit costs. Surely firms which have been making huge profits over the years—and no one can deny that the motor car industry has been very profitable—should be thinking, not of increasing their prices, but of reducing them to stimulate their market.
Not long ago, when the National Coal Board increased its prices, hon. Members opposite argued that it was crazy to do so at a time when the Board had huge stocks on its hands. Let us remember, however, that the Board was never allowed to function as a commercial concern. The Government stopped that at a time when it could have demanded increased prices. The Board therefore had no alternative. In an industry such as the motor car industry which has made fantastic profits over the years, and in view of the stocks which there are practically all over the Midlands, surely it is completely suicidal for manufacturers to think of increasing prices. I should have thought that the opposite was the right thing for them to do.
So far, I have discussed methods of stimulating the home market. I accept that these are purely emergency measures. I suggest that what is required is a long-term overall plan to secure stability in the industry. The Government have never shown the slightest interest in such a plan. Each motor car company has made its own plans for expansion with a view to obtaining a bigger share of the existing market. I wish to ask the right hon. Gentleman whether he has ever tried to get the car companies to co-operate together more in considering ways to ensure that we get a far better product for export. It seems to me that the Government are merely opting out of what is an extremely difficult situation for which their policies are in very large measure responsible.
The result of this lack of interest by the Government has been a completely unplanned sprawl, unrelated, for instance, to the road programme and matters of that sort over which the Government have complete control. What is the right hon. Gentleman's opinion about the number of models coming from British firms? Are there too many? Is there sufficient standardisation? These and similar unanswered questions can be answered only by a thorough investigation

into the present and future requirements. We therefore ask the Government to set up a working party to do that job.
There is no doubt that Government inaction in face of this worsening situation is now causing the employees in the industry, through their trade unions, to believe that the Government are quite satisfied with the present position. I read that Mr. Jones, the Midland region secretary of the Transport and General Workers' Union, recently said that he wondered whether this was part of the artificial slump which the Government wants to see, and whether it was the working out of a plan to relieve economic pressures and damp down wage demands.
The Government have announced agreement with a number of car firms to expand into development districts; indeed, they have given financial assistance to companies which have indicated their willingness to develop there. But, having done that, the Government have introduced credit restrictions as part of their general damping down of the economy and have maintained those restrictions while the industry has been suffering from export difficulties.
Reviewing the matter, it would appear that the main reason why 100,000 people are now on short-time work and many thousands more are unemployed is that the Government clamped on their restrictions at home at the very time when the success of the American compact car in the United States was causing a considerable fall in our exports to that country. I should think that the timing was brilliant if the object of the exercise was to ensure a build-up of unsold cars in Britain.
Can the right hon. Gentleman say what the Government have in mind as to the size of car industry at which we should aim? During the last five years car production has increased three times as fast as industrial production as a whole. Gross new fixed investment in the industry doubled between 1951 and 1959, compared with a rise of 60 per cent. in the rest of the manufacturing industries, and a large construction programme is again in progress. Of itself, this is a very fine performance, and I am glad to pay my tribute to the industry in this respect. But I was his P.P.S. at


the time when the late Sir Stafford Cripps brought the members of the car industry together and laid down that as a condition of his agreeing to the importation of large quantities of sheet steel they had to agree to export a fixed quota of their products. They told him how impossible the whole thing was, but they did even better than he asked of them.
The basis of our great success in exporting cars was laid by the late Sir Stafford Cripps and this points to the fact that, given proper direction and encouragement by the Government, these things can be accomplished. But who, in heaven's name, has ever heard this Government trying to give any sort of help or direction to an industry in order to secure progress in exports?
We have now reached the state in which the existing capacity of the industry is far more than the 1·3 million cars which it expects to produce this year and next year. Indeed, in the first half of this year production was running at the rate of 1·6 million cars. Plans for expansion have already been announced in Scotland, South Wales and Merseyside, and this will increase capacity during the next three or four years to a level of about 2½ million cars a year—excluding commercial vehicles—at a cost estimated to be about £300 million. This presupposes the need to export about 1½ million cars, and in those circumstances we had better look at the prospects in the export market.
When sales to North America were at their highest, in the first quarter of this year, the United States and Canada took about 50 per cent. of our exports, in value. For the rest, 26 per cent. went into the sterling countries where, as in the case of Canada, British cars generally enjoy some tariff preferences. In the second quarter the upward trend of sales to North America was reversed, and between the second quarter and the seasonally unfavourable third quarter there was a further drop of nearly a half.
I would advise the House to consider that in the United States car production in 1960 will be 6¾ million, which is 1 million more than it was in 1959. I do not know whether hon. Members opposite have read two very good articles on the car industry which appeared in the

Financial Times on 2nd and 5th December. The article published on 5th December says:
British manufacturers were able to secure their rapid expansion in a static market by concentrating on a range of smaller models where American manufacturers were deficient. With the coming of the 'compacts' this gap has been largely plugged.
Indeed one British car executive who has driven both his own product and the equivalent U.S. compact told me he had no doubt that the American model gave better value for money.
Dealing with the Canadian position, the article went on to say:
Nor does consideration of the Canadian market, where conditions have a certain similarity to the U.S. (and where new duty valuations have added 150–180 dollars to the price of some British models) do more than brighten the picture faintly. Any major expansion of U.K. car exports will have to be sought outside North America.

Mr. Frank Tomney: It is not possible.

Mr. Lee: My hon. Friend says that it is not possible, and he may be shown to be right. My point is that it is fairly obvious that we cannot expect, from now on, with the compact car making great inroads into the small car market there, to be able to have a free ride in our exports to the United States.

Mr. Nabarro: The hon. Member is over-simplifying things when he suggests that we ever had a free ride in the sale of motor cars in. North America. We have sold increasing numbers of cars in North America in the teeth of the fiercest competition, notably from the Volkswagen and French cars. The present decrease in our sales is due to the fact that United States dealers are temporarily largely over-stocked. That is what the Financial Times says.

Mr. Lee: It is the hon. Member for Kidderminster (Mr. Nabarro) who is over-simplifying it. He is forgetting that the sales of the compact car are a considerable item in minimising our ability to get our exports into the United States. In the future there is sure to be an increase in the number of small cars produced by the Americans. I agree with the hon. Member in the sense that we have had great success in the North American market. About 50 per cent. of our car exports have been going there, and that is a very good thing, but it brings me back to the fact that when we


have this kind of new development in a market upon which we have been relying above all others, we are getting into rather serious difficulties.

Mr. Nabarro: The hon. Member stopped short in his quotation from the Financial Times of 5th December. I had the prescience to know that he would quote from that article. He omitted to add that the article went on to say:
Part of the present glut of British cars in the U.S. is, it is true, due to the over-stocked position of individual dealers.

Mr. Lee: I do not see that that in any way contradicts what I am saying.

Mr. Nabarro: The hon. Member ought to have quoted it. That is the point.

Mr. Lee: Not in the least. As usual, the hon. Member is looking at the past. The past has resulted in over-stocking. I am trying to project his mind into the future, which is a very difficult thing to accomplish. Nevertheless, I do not despair. I live in hope.
I was saying that the position in the United States or in the North American market as a whole is nothing like so favourable as it has been for the past few years. In the sterling area, however, in the third quarter of 1960 we improved our position. Exports totalled £15 million, compared with £10 million in the corresponding quarter of 1959. Exports to the Common Market countries also rose—which is remarkable—from £3 million to £5 million over the same period, while exports to the European Free Trade Association countries were down from £3½ million to £2½ million, the main reason being that in the Swedish market, which has been our biggest single market in this respect, we are now facing fierce competition from Sweden's own products, and it would not appear that we have a great deal of hope in that direction.
I would remind the House that we are now coming to the phase in which the Common Market is about to create its first tariffs against us. I understand that on 1st January next the first external tariffs will be clamped on. The effect of this at a time when we are already losing markets in other parts of the world may well be quite serious to our hopes of expanding exports at all. I could mention other parts of the world where

we are having some degree of success in selling our cars, such as in the Middle East, but the purchasing power in those areas for a long time will be deficient if we are thinking in terms of a really large expansion of our exports.
Mention has been made of our success in the United States. This is not only a question of the production of cars in the United States itself. One of the outstanding features of the market out there is the continuing success of the Volkswagen. There registrations this year are up by 41 per cent., while the average decline for British cars, which is a fall of 20 per cent., was much the same for all foreign cars, excluding the Volkswagen. Therefore, we are not holding our position in a contracting market. Apart from Volkswagen, there is no other car enjoying a success in America.

Mr. Tomney: There is the Sunbeam Alpine.

Mr. Lee: The sports car section is a very small section indeed.

Mr. Philip N. Hocking: To what extent does the hon. Member think Jaguars have a share in the success in America?

Mr. Lee: Again, we are discussing a highly specialised car and this is not going there in numbers. [HON. MEMBERS: "Oh"] I am thinking, of course, of percentages of our product and of our exports.

Mr. Tomney: It is generally 1 per cent.

Mr. Walter Monslow: Is not the salient point that we are exporting only one-fifth of what we exported to America a year ago?

Mr. Lee: I am saying that the prospects in the North American market are not good, and hon. Members would not deny that. I am saying that in the Common Market countries, which are our greatest alternative market to North America, we again face a severe restriction. In fact, the first tariffs go on against us on 1st January.
I should like to illustrate how this will work. On our exports to Germany we have to face a tariff of 14·8 per cent. whereas exports from the Common Market to Germany face a tariff of 11·9 per cent. Our exports to the Benelux countries face a tariff of 24 per cent., whereas


exports from the Common Market face a tariff of 16·8 per cent. The comparable percentages for France are 29 per cent. on exports from Britain and 21 Der cent. on exports from the Common Market, and for Italy 38·5 per cent. on exports from Britain and 31·5 per cent. on exports from the Common Market. This is merely the first instalment. As we visualise the more distant future, it will be increasingly difficult for our people to get their products into these markets.
If the export effort from this country is to match anything like the increase in production to which I have referred after the further expansion has taken place, there must be a large increase not only in the market into which we are now getting them but in a market which as yet is practically untouched. I am told that in some parts of Africa, such as Kenya, our cars are not taken because of their performance. I was talking to people who had recently been in Kenya, where the Volkswagen is in great demand. They tell me that the suspension of our cars is nothing like good enough for the road conditions in those parts of the world. This again gives point to what we on this side of the House were saying about the need for a working party which can analyse these various components and make decisions upon them.
While we welcome new investment in industries and have pressed for it for a long time, we must make the reservation that to have an extremely large expansion in this industry which may not be justified by events, with Government action limiting industries with small resources, would impede the growth of the economy in general. I am quite sure that the President of the Board of Trade would agree that at this time, when our exports are going very badly, that would be damaging to the community.
We would welcome some more information on the proposed Ford deal. I do not see the Chancellor of the Exchequer present, but perhaps he will be coming in later. Since the House last discussed the matter of Mr. Henry Ford's offer for the minority shares in Fords, of Dagenham, 18,000 of the company's employees have been placed on a four-day week. It would appear that the interests of those who invest money in Fords and

of those who invest their lives are moving rapidly in opposite directions.
The disclosure of the views of the United States Government, as expressed by Mr. Anderson, make necessary more detailed information about the position of Her Majesty's Government. I should like to ask the President of the Board of Trade whether, when the Chancellor took his decision to agree to the Ford deal, he was aware of the attitude of the United States Government. We know that Mr. Anderson was over here a few days ago and we take it that he discussed the matter with the Chancellor at that time. Perhaps I can have confirmation or denial of that.
We should like to know whether the full payment of 358 million dollars will be made in American currency or, if not in dollars, in what form of currency it will be made. We should like to know whether the Chancellor is insisting on dollars and whether his decision to go ahead in this matter depends upon that form of payment.
We know that the American Treasury has asked Mr. Ford
… to consider the impact of the deal on America's worsening balance of payments.
It would appear that Mr. Ford has returned the sort of answer which we remember on another occasion, the appropriate interpretation of which would be, "It may be anti-American and derogatory to the dollar but, on balance, it makes sense to me".

Mr. Frederic Harris: On a point of order. Is this reference to the Ford deal in order?

Mr. Lee: Further to that point o' order, Mr. Speaker.

Mr. Speaker: The hon. Member for Croydon, North-West had better make his point of order before the hon. Member for Newton (Mr. Lee) makes his.

Mr. Harris: According to the Amendment before us, one would not have thought that it was in order to make a reference to the Ford deal at all, as it could not possibly have an effect on employment in the industry.

Mr. Speaker: I am not sure that I follow the hon. Member's point.

Mr. Lee: We are discussing motor car workers who are on short time. I have


mentioned that 18,000 of Ford's employees at Dagenham are now on short time, and the question of the ownership of the Ford factory there is very relevant indeed to their future employment.

Mr. Harris: I was referring to the fact that the Ford deal has not yet gone through and, therefore, it cannot possibly affect the situation.

Mr. Speaker: One of the things involved in the Amendment is the setting up of a working party to consider the future of the industry. It is very difficult to think of what one cannot get in under that.

Mr. Lee: That only confirms that our drafting has been successful, Sir.
I was asking whether the Chancellor of the Exchequer knew of the attitude of the United States Government before the decision was made and I was asking about the question of payment in dollars or otherwise. But now the matter assumes proportions of a kind different from that which it possessed when the House discussed it last, because this is now a difference between two Governments. The Government are well aware of the difficulties which the United States is having with its balance-of-payments problem. The American Government have announced a programme to save 1,000 million dollars in foreign spending. We know that that programme has not got off to too good a start.
The fact is that the American Government have no power to stop this transaction themselves and may well decide to take other steps to stem the outflow of gold. We see in this morning's newspapers Mr. Anderson's comment about dollar convertibility, which should be studied very carefully. He said that there is a 1960 payments deficit of nearly 4,000 million dollars, and that this deficit would create a problem if it were cashed or claimed as a credit against the nation's gold reserves. It seems to me to be getting precious near to the case that Mr. Anderson is arguing Her Majesty's Government are now condoning. It may be that our very inadequate reserves, bolstered as they are by a large proportion of "hot money", might well suffer more in consequence of United States Government actions, if driven too hard, than anything that we hope to get out of this particular deal.
Therefore, I should like the President of the Board of Trade to give us the answers to these questions when he addresses us. It would appear from the results to hand of the Moscow conference of the Communist countries that we can expect some intensification of the economic struggle with the West. Our people will be well advised to ponder about the relevance to this struggle of policies of high level stagnation and unplanned industrial sprawl, bringing lurches between boom and "bust".
I believe that many enlightened employers now accept that only by careful planning and a balanced economy, with the priorities given due weight, can we hope to maintain our position. This party—

Mr. Nabarro: Which part of the party?

Mr. Lee: This party and only this party, among the political parties in this country, believes in and would produce such an economy. Within it, we would enshrine a far higher concept of the freedom and the dignity of the individual than either Communism or capitalism can ever bring.
In this vital issue, time is not on the side of the West. "You have never had it so good" is a sinister influence on a nation fighting for its existence. It is for my party—if that suits the hon. Member, for Kidderminster better—and not that of right hon. and hon. Members opposite, to shake the nation out of its apathy and offer the only worth-while alternative, which is democratic Socialism.

4.33 p.m.

The President of the Board of Trade (Mr. Reginald Maudling): At the end of his speech, the hon. Member for Newton (Mr. Lee) asked me questions about the Ford deal. I think that he will find that my right hon. and learned Friend the Chancellor of the Exchequer answered them this afternoon in reply to Questions from the hon. Member for Dewsbury (Mr. Ginsburg), so I do not think that I ought to repeat what he said.
I should like to turn to the subject of the debate, which is the state of the motor industry. I am sure that we would all start by agreeing as to the immense importance of this industry, not merely the assembly plants, but the component


manufacture, the dispatch, servicing and maintenance—all these facets of the industry employ a very large proportion of the labour force of this country, and, as the hon. Gentleman rightly said, the export record of the industry has been and remains extremely good. It is exporting nearly 50 per cent. of its output, and those engaged in the industry tell me that they aim at a 50 per cent. export record. Therefore, there can be no doubt that the problems of this industry fully deserve the attention of the House, and the Government certainly welcome this debate.
At the same time, perhaps, I may also point out that just because the industry is of such a far-reaching character, any measures we take to assist it or otherwise have very far-reaching effects upon the whole of the economy. Equally, though this is strictly entirely a debate on the motor car industry, there are other industries that have their problems—domestic appliances, television and radio—and I do not think one could contemplate taking action solely for the motor industry while doing nothing for other people who can claim that they are facing similar difficulties. It is only reasonable, while we examine the motor industry, which deserves close attention, to recognise that any measures proposed or advanced in this field will have ramifications outside the motor industry itself.
On the need for restrictions generally, to which the hon. Member referred, perhaps I might again state very briefly the Government's reasons for our general policy of credit restrictions at present, of which the hire-purchase restrictions are a single but an integral part. It is clear that while a strong home market is a good base for exporting, an excessive home market is a thoroughly bad thing for our balance of payments and the strength of sterling. If home demand is too strong, it certainly diverts effort and goods from the export market. With motor cars, there is possibly a rather different development.
In the early part of this year, when export demand was very strong indeed, if motor car manufacturers had exported even more than 50 per cent. of their output it would merely have meant longer waiting lists and bigger imports of foreign cars, and, therefore, the benefit to the balance of payments of such

a strong home market would be negligible. But a strong home market means increased imports, both for consumption and stock, for if people see demand growing and shortages occurring, they buy more stock more strongly than they would otherwise do. One can see the effect of stock-building in the very heavy import bill at the moment.
Finally, any fear of a return to inflation in this country is bound to affect confidence in sterling throughout the world. For all these reasons, restrictions are necessary both in the interests of the balance of payments and the strength of the currency. In conditions in which all Governments aim at a policy of full employment, this country must always be working on narrow margins, and our dependence on world trade means that we must be ready to react very quickly to any shifts and changes in world trading conditions. We must be prepared rapidly, if necessary, to adjust our situation to changes in world trading circumstances. We must be ready whenever necessary to impose restrictions on the home market if that is essential to maintain our balance of payments, though, obviously, no one will impose restrictions merely for the sake of restricting.
Looking at the position of the motor industry, what has been said so far has been confined to the passenger car section, because the commercial vehicle people, we are all glad to see, are doing very well. So far as passenger cars are concerned, there has been in recent years a vary vigorous expansion indeed in the output of this industry. It is traditionally and, I think, inevitably an industry which is subject to fluctuations in demand. When one is selling a thing like a motor car for which unit costs are high, and where people can postpone their purchase for weeks or even months at a time, there are bound to be substantial fluctuations, and the history of the industry has been that of a fluctuating demand with fluctuations taking place on either side of a production curve, which on average is rising strongly.
Between 1953 and 1958, production rose by an average of 11½ per cent. per year, more than three times the average of industrial production generally. Between 1958 and 1959, output went up by 13 per cent. In the first half of this


year, there was an astonishing increase of no less than 34 per cent. At the same time, the labour force in the motor vehicle industry rose between October, 1959, and September, 1960, by nearly 10 per cent.—from 405,000 to 445,000. Any experience and analysis will show that a curve rising as steeply as that cannot continue at that rate. If there is this very rapid rate of expansion, there is bound to be a slackening off.
The difficulties first arose in the export market, particularly in North America. In the first quarter we shipped 55,000 cars to America, but in the third quarter we shipped only 21,000. We shipped 30,000 to Canada in the first quarter, but only 14,000 in the third quarter. That was the first and biggest setback that the industry experienced in 1960, and it is a combination of the competition of the American compact car, to which much reference has been made, coming at a time when dealers' stocks in the United States were high. The combined effect was a steep drop in the rate of shipments from this country to North America.
Home demand, in fact, has held up very well. Although the hire-purchase restrictions, about which we hear a great deal, were introduced in April, registrations of new cars in this country remained well above the figure for last year, up to September-October. It was only in September-October that the curve turned down. The home market remained strong throughout the summer, but not strong enough, of course, to absorb the very large number of cars destined for export but which could not be sold in the changed conditions of the American market.
Of course, when we see the out-turn in sales and new registrations in September-October we must take some account of the psychological condition which has been created by the stories about the industry which have been put around. Many of the stories about the difficulties in the industry have been exaggerated, but the effect of that exaggerated gloom and of the constant claims for tax reductions, and so on, are, naturally, to cause the customer to wait before he buys his motor car. It is important to bear that in mind. It was for that reason that when my right hon. and learned Friend saw a deputation recently on the

subject of Purchase Tax he said quite firmly that he did not believe that a change in Purchase Tax should be made. He said that because persistence of doubt in these matters is bound to make trading conditions more difficult.
In October, production was 8,600 cars a week below the peak reached in the second quarter and of that shortfall of 8,600, 7,000 was in respect of exports and only 1,600 in respect of the home market. It is, therefore, quite clear from any analysis of the figures that the major problem which the industry has been facing has arisen from the setback in the export markets, particularly North America.

Mr. Douglas Jay: Can the right hon. Gentleman tell us, if he deplores and regrets the fall in home sales, what is the purpose of continuing the Government's restrictions?

Mr. Maudling: If the right hon. Gentleman will allow me time, I will come to that. Obviously, the restrictions are designed to restrict something, or we would not have them in force. I thought that I had made it clear that the shortfall in production arose far more from the fall in exports than the fallback in the home market. I am not saying that there has been no effect on the home market, but the export position is the major factor.
There are two problems, long term and short term, and it is most important to keep the two separate. All the manufacturers have expressed their confidence in the future and I know of no manufacturer intending to withdraw from his expansion plans.

Mr. Maurice Edelman: The right hon. Gentleman was good enough to communicate with me and to tell me that he had no information that Standards intended closing its factory at Speke No. 2. Is he aware that it is the general impression that the Speke No. 2 expansion has been suspended? Will he confirm or deny that?

Mr. Maudling: General impressions are often very dangerous in this industry and I confirm that I have no information to suggest that there has been any change in Standard's plans. If I had information, I would certainly make it known, but, in fact, I have received none.
No one in the motor industry expects the rate of expansion which we saw between 1953 and 1959 to continue, Plans for expansion of the industry are based on a production curve which approximates from now onwards much more nearly to the general rate of expansion in industry. No one is expecting to see in the 1960s the 11, 12 or 13 per cent. annual output increase which we saw in the late 1950s. Only in the first half of 1960 did production soar far above the point that would have been reached with a consistent expansion of the industry.
Therefore, if there is great expansion in the first half of the year and a temporary setback afterwards, that does not affect the long-term average rate of expansion, and that is why the industry as a whole expected and anticipated some slackening in the phenomenal expansion rate of the first half of the year and why it sees no reason to change its long-term estimates.
In this long-term picture, it is very important to pay attention to the export problem. Certainly, the American market has become and will grow more difficult. The actual shipments to America in recent months rather exaggerate the problem, because the rate of shipping to America has been well below the rate of sales of British cars in America where there has been a substantial running down of stocks. That position is bound to right itself automatically, but, in general, export markets are getting more difficult and the Government and the industry have a responsibility to try to face the export problem.
My right hon. Friend the Minister of State will later be dealing more extensively with the question of export markets, but it will be generally accepted that the Government's responsibility is to provide opportunities and industry's responsibility to take those opportunities once they are provided. The short-term fluctuations cannot be avoided. The hon. Member for Newton talked about planning and long-term planning, and so on, but no one has yet explained how demand is planned. How can one plan how many cars people in Birmingham want to buy next year?

Mr. Nabarro: Or Timbuctoo.

Mr. Maudling: Timbuctoo even more, although that figure has less relevance in terms of absolute size. Whether it is Birmingham, England, or Birmingham, Alabama, demand is unplannable and there are bound to be substantial fluctuations in the demand for the products of this industry.

Mr. Frank Bowles: Could not the Government stimulate demand by easing credit restrictions, and so on, as they did in 1955 and 1959, when production was definitely stimulated?

Mr. Maudling: Did the hon. Gentleman object to that at the time?

Mr. Bowles: No, that is how to stimulate production.

Mr. Maudling: If the hon. Gentleman looks at the facts, he will see that although hire-purchase restrictions were removed in October, 1958, the big upsurge in the buying of motor cars did not come until a year after that, and the proportion sold on hire purchase varied very little between 1958 and 1959. If hon. Gentlemen opposite had objected to that increase in demand, I would have been more prepared to listen to that argument, but they did not.
Although the fluctuations have caused considerable difficulties for people working in the industry, they should not be exaggerated, and we should study them against the general background of industry and employment in the areas concerned. I believe that the latest figure of people redundant in the industry is 7,000, which has to be compared with the figure of 40,000 people who entered the industry in the last twelve months. At the end of October, Vauxhalls declared 950 people redundant, but I am happy to say that fewer than half a dozen of them remain registered unemployed.
There is undoubtedly a considerable and persisting shortage of labour in those same areas and firms with substantial export orders very often cannot get the labour they want. It is important to remember that when considering these problems. I agree that they are problems for the people employed in the motor industry.

Mr. Julius Silverman: Will the right hon. Gentleman deal with the problem of part-time or


short-time working, which is a form of concealed unemployment?

Mr. Maudling: That was the next point I intended to make.

Mr. Francis Noel-Baker: My constituency is very badly hit because there are not only difficulties with the Pressed Steel factory, which is just outside Swindon, but great difficulties with the radio components and domestic appliance industries which the right hon. Gentlemen mentioned. What he has just said does not apply to my area, even if it applies to others.

Mr. Maudling: I am sorry that I do not carry in my mind the details of the hon. Member's constituency, but I am sure that what I have said is generally true of the engineering districts of the Midlands.
Short time certainly means less earnings and that is a serious matter, but, even on a three or four-day week, both skilled and semi-skilled men in the motor industry can earn money which compares well with the general rates of people working full time in other industries. Hence, obviously, the reluctance of many people to move out of the motor industry into other industries. It is not unreasonable to say that in an industry which fluctuates very much and where profits and wages can be high, and, indeed, very high when the swing is going upwards, people must expect some reduction of both when the swing is going down. That is a perfectly reasonable proposition so long as the general average remains sound, as I believe it does.

Mr. Victor Yates: I am trying to follow the right hon. Gentleman's argument about fluctuation. I wonder whether that process will, in fact, go on. In Birmingham, for example, the number of men on short time is increasing every week and in November it rose from 30,000 to more than 70,000. There is no fluctuation the other way. I do not understand the basis of the right hon. Gentleman's argument that this is mere fluctuation.

Mr. Maudling: It is based on experience in the history of the industry. There was a similar cry two years ago which

was followed, after a demand from the party opposite for emergency measures, by the biggest expansion in the industry's history. After three years of this unexampled expansion, which was three times bigger than in industry as a whole, it is not surprising that there is a falling off in the pressure of demand.
I was coming to the question of fluctuating demands. While we cannot plan or determine a steady rate of growth in sales, we should do all we can to try to reduce the amount of fluctuation that take place. I hoped to hear today some ideas from the party opposite, but we have had none. The party opposite puts down what amounts to an Amendment of censure, saying that we should do this, that or the other, without explaining what we ought to do.
The hon. Member for Newton was very careful not to commit himself about Purchase Tax. He said that we should examine it. That is not the sort of thing that a censure Amendment is generally meant for. Does he suggest that we should reduce it now and put it up in a few months time when the demand for cars has risen, or do away with it altogether? Where will my right hon. and learned Friend find the £50 million or £100 million for his Budget to offset this reduction? The party opposite should suggest a serious alternative.
I was astonished that the hon. Gentleman talked about a working party. Apparently he has forgotten the existence of a useful body called the National Advisory Council, set up by the Labour Government. I think that it was a good move. It contains, as he suggested that a working party should contain, representatives of the Board of Trade, the manufacturers, component makers, and trade unions, and an independent member. I see no difference between the Council and a working party. It is a very effective body. My impression is that the unions think the same. They co-operate with it fully. I have heard from them no complaint or suggestion that the Council should be scrapped and something else put in its place.
There is no limitation on what is discussed by the Council—apart from wages, and I think that the party opposite would agree that it should not do


that. Everything that has been mentioned can be discussed by that body, and is discussed.
The hon. Gentleman also mentioned standardisation. We have had a study of that made in the Council.

Mr. Lee: What happened?

Mr. Maudling: A great deal has happened. The standardisation of axles, gear boxes and other components is very much more advanced now than a few years ago. The Council has made great progress in these matters, and the manufacturers are constantly studying these problems. At the last meeting of the Council we started a new study with the manufacturers, helped by the unions, into all export markets of the world.
I agree that these things should be done, but they are being done already by precisely the body which the hon. Member's own Government set up and which has been working for several years. What is the point of getting rid of the Council and having a working party instead? If such a working party were to be an advisory body it would not improve on the present Council. If it were to be an executive body, then that is a different matter. Whether the hon. Member is still hankering after some form of nationalisation, I do not know. [HON. MEMBERS: "Hear, hear."] Some of his hon. Friends are, I know. The only thing which lies behind this idea is some form of nationalisation under another name. There is no other reason for putting this forward.
Export credits have been referred to. I doubt whether much can be done. The normal custom in this industry is to sell for cash or on short-term credit. I doubt whether it would be worth while on commercial grounds to make an extension of this as a long-term policy in order to gain a short-term advantage. The Export Credits Guarantee Department is anxious to help, and there are special provisions for helping in such operations as stockholding overseas, which should be of considerable help.
The main point which has been raised in the debate—and this is in the minds of many hon. Members—is the question of hire-purchase restrictions. As I have argued, they are undoubtedly having some effect on the level of home demand. But they are part of the general pattern

of credit restrictions, the purpose of which is to reduce the import bill, to free more goods for export, to prevent diversions from exports to the home market, and to contribute to the strength of sterling.
As my right hon. and learned Friend has said more than once, he is determined to relax hire-purchase restrictions as soon as possible, but not to relax them until, in his opinion, it is safe to do so in the general national interest. It will be the desire of the House as a whole that he should continue to follow that policy.

Mr. F. Harris: Does not that very doubt cause a slackening of home demand at present? People are holding up buying on the home market, thinking that they will be able to get three years in which to repay instead of two years. Is that not causing part of the present trouble in a large sector?

Mr. Maudling: There is a lot in that point. But I do not see how it can be avoided. It is clear that some relaxation will be made as soon as possible, for powers to restrict hire purchase are limited to using them in cases where we need to restrict excessive credit. Once we see the excessive credit situation disappearing, we no longer have the legal power to restrict at all. At some stage these restrictions must be relaxed and the uncertainty cannot wholly be avoided. There is uncertainty here of the same kind, but not on the same scale, as when people propose a reduction in Purchase Tax.

Mr. Harris: Could not my right hon. Friend go a little further than this and say that perhaps for the next six months the position will remain the same? That would relieve people of uncertainty.

Mr. Maudling: I wish that I could, but it would be very difficult to do, because the position depends so much on international trade, and because it is impossible to predict what will happen, for instance, in the American market—how long and how far the American recession will extend. It would be giving a hostage to fortune in many sectors of credit policy if I made a forecast of that kind.

Mr. Monslow: The stimulating of the American market at the moment is due to increased credit facilities not only for


cars, but for all consumer goods. Would it not be possible to do that here and stimulate demand?

Mr. Maudling: I understood that the trouble there was that, on the whole, demand was declining rather than expanding.

Mr. Monslow: Credit facilities have been given more generously in recent months for cars and consumer goods. If that policy is paying in America in stimulating home demand, would not a similar policy be beneficial for this country?

Mr. Maudling: Yes, if applied at the right time, I agree. But the question is: what is the right time? My right hon. and learned Friend the Chancellor of the Exchequer is of the opinion that the right time is not now. [An HON. MEMBER: "What is your opinion?"] That is my opinion, too.
My general conclusion is that the future of this industry can obviously be very bright. On the whole, it would be brighter if it were not made a matter of party controversy and censure debates, but of co-operative effort to try to solve its problems.
In this country, we can make any type of car on a competitive basis with anyone. The problem is to ensure that we do so. That involves both sides of industry, as well as the Government. Competition is getting fiercer, but in some senses more limited. Most cars made in the Western world now have reasonable standards of performance, comfort and safety. The differences between the products of the different countries are being narrowed. That means the greater importance of original design and technical innovations, with greater attention to price and delivery, and, particularly, to reliability and servicing.
Obviously, it is upon all these things, that, fundamentally, the future depends. Bad management, lack of enterprise, stoppages of work, or slipshod methods of working are dangerous and damaging to everyone involved in the industry.
I think that the industry is entitled to look to the Government and to the country for help in its difficulties, just as are other industries which are

similarly placed. In so far as it is consistent with national policies and the need to preserve the balance of payments and the position of sterling, the Government will certainly give help to the industry. In exchange, the country is entitled to look to the industry, both management and people employed in the industry, to keep costs down, to keep technical advance proceeding, and to ensure that the standard of workmanship remains high enough to win and retain in the world's competitive markets the sort of place to which we have been accustomed, and to which the skill and enterprise of our people can accustom us in the future if they are prepared to use them fully.

5.1 p.m.

Mr. Edward J. Milne: May I crave the indulgence of the House in what every hon. Member regards as a major ordeal. If the tolerance of hon. Members matches the kindness which I have been shown since I arrived last Tuesday, there is no doubt about my ultimate emergence from this test.
One of my illustrious predecessors who represented the same area of the country, that widely respected and well-loved miners' leader Bob Smillie, began his maiden speech with the quotation:
Ill fares the land to hastening ills a prey
Where wealth accumulates and men decay.
To some extent, in looking round my constituency, the setting in its modern context seems very much the same. Coal, railways and shipbuilding are very much in decline, and, despite the magnificent efforts of the local authorities in the area, who have made supreme efforts to bring new industries into the district, unemployment continues to rise. The real issue on the basis of rising unemployment is, of course, the failure to attract some of the industries from the areas that have been discussed this afternoon.
The length of the unemployment period is increasing. School-leavers, who in the past two years have generally been offered jobs, training and apprenticeships in the Midlands, Luton, Slough, and other car-producing areas of Britain, are finding that this supply is drying up. While I am not happy about youngsters leaving their homes during their formative years, the car industry and its related trades nevertheless cushioned the


full impact of unemployment in the north-east of England.
However, as we have heard this afternoon, that avenue is closing. Although we have no car industry in Blyth or in the north-east of England, nowhere will this debate be followed more closely than in that corner of the north-east of England which I am now proud and privileged to represent. In the expansion of the car industry and its ancillary industries lies much of the hope of bringing new industry to the area and staving off the effect of pit closures, railway redundancies and the lack of orders in the local shipyards.
I am grateful to my Conservative opponent in the by-election for accurately summing up the Government's policy in relation to the area when he said that the affluent society had stopped short at the borders of Northumberland. The impression is being created in the country—and I think that I can claim to have a closer contact with it than many hon. Members at the moment—that we are creating a Britain for some people to profit in, and a Britain in which it is held in higher regard to work with two telephones than with two hands.
There are two factors in the car industry which must receive the closest possible examination. We all deplore the decline in the industry, but its impact is being felt elsewhere. New techniques of production, and new metals, for example the use of aluminium in place of strip steel, are bound to create uncertainty of employment in many areas. If these industrial problems are not tackled by the Government, they will be increased and aggravated by the monopolistic tendencies we are seeing at the moment in the motor industry which is dominated by four major firms, two of them British and two of them American. While that is the situation tonight, no one knows precisely what will be the position when we open our morning papers tomorrow.
My constituents depend for their livelihood mainly on mining. There have been attacks on miners from time to time, but we in the Blyth constituency know the value of the contribution made by the mining communities of Britain to the magnificent recovery of the country's economy following the most destructive war in history. Having spent

the first six of the post-war years in the car-producing area of Birmingham, I know how dependent and appreciative the industrial workers of that car city were of the miners' efforts, efforts which were made in the face of superhuman difficulties.
In supporting the Amendment, may I be permitted to call upon the Government to take immediate action to consider the future of the motor industry, and also to remember that in any examination or inquiry which may be made we should like consideration to be given to the spread of the motor industry throughout the country. It is obvious, from what has been said that the economy of the country will for a long time depend on the industry we are discussing.
If, under the present Government, we get round to the question of expansion, we must consider the siting of plant and factories in the north-east of England, and in particular in my constituency, where we have the docking and transport facilities to handle, not only the import of raw materials needed for the trade, but the export of the finished article as well. We have within our ranks in that area the industrial workers who have the skill and craftsmanship which can readily adapt itself to any new task. The workers there have a skill and craftsmanship which goes back to the dawn of the Industrial Revolution. The rails on which Stephenson's Rocket ran were made in Bedlington in the constituency of Blyth, and what we were able to do at the dawn of the Industrial Revolution we can repeat in the second half of the twentieth century.
By tackling the immense problems that have been presented by the challenge of a new age the Government may have to turn their backs on some of their traditional policies, but turn their backs on them they must if we are to prevent the situation to which I referred earlier, and if we are to check the unhappy accumulation of wealth and the decay of men in our industrial areas.

5.9 p.m.

Mr. Philip N. Hocking: I am pleased to follow the hon. Member for Blyth (Mr. Milne), having myself not very long ago made my maiden speech. I congratulate him on


the way in which he delivered it. It is an ordeal to which new hon. Members do not look forward, but I am sure that, having passed through the ordeal, he will feel happier, and we shall look forward to hearing him again.
My mind goes back to almost a year ago when it seemed that every hon. Member was asking for a slice of the motor car industry to be put in his constituency. Hon. Members for Scottish constituencies were asking for a portion of the industry to be moved there. Hon. Members for Welsh constituencies were asking for the expansion of the motor industry to take place in South Wales. The same can be said for hon. Members from the north-eastern and north-western parts of the country. Representing as I do a motor car city—the City of Coventry has been connected with the motor car for almost as long as it has been in being in this country—I wondered at that time whether I was to see a rundown of the industry within my city.
The industry was urged by all to expand. I do not think that a year ago anyone would have suggested that the industry should contract in any way. No one suggested then that there were dangers to be seen in this expansion. It is worth noting that in the first ten months of this year production has increased by slightly more than 10,000 vehicles as compared with the same period in 1959. In 1959, 1,200,000 motor cars were produced. Of that figure slightly more than half were registered on the home market. It would appear from today's figures that the same number of vehicles are being registered in this country in the present year. Therefore, it would seem that the home market, as my right hon. Friend said in his speech, is holding its own. That left 540,000 motor cars to be exported during 1959.
As I see it, we are today discussing an Amendment which has been set down by the opposition concerning short-time working in and the difficulties of the motor industry. I note that in this very cleverly worded Amendment all these difficulties have been laid at the feet of the Government. I submit that that is not so. If we look around we find that there are difficulties in the world market.

If one has bothered to go through the Trade and Navigation Accounts month by month during the year one sees that these difficulties are widespread throughout the world.
I submit that these difficulties have been caused very largely through the uneasiness and the tension that is to be found throughout the world. I believe that the failure of the Summit Conference earlier this year contributed to a falling off of import inquiries by people in various parts of the world. Some of them have felt uneasy about purchasing various goods, and I think all hon. Members would agree that the Presidential election in the United States has contributed to a considerable extent to the falling off of the market in that country.

Mr. Dan Jones: Will the hon. Gentleman give way for a moment? He is attempting to say that these difficulties are not connected either with the industry or with the Government. He also mentioned that no one would have said twelve months ago that these difficulties were even anticipated. May I point out to the hon. Gentleman that in April this year I warned the Government that the situation in the industry would deteriorate in the autmun? I made specific references to the fact that the American automobile industry was tooling up for the manufacture of a small car. It was obvious that they would produce one and that, having produced it, they would not allow our cars to enter the market. I do not think it is possible to skate over that difficulty. I suggest to the hon. Gentleman very sincerely that this is a very serious matter and that the Government and the industry ought to have been prepared for what has happened. It is no use trying to skate over that.

Mr. Hocking: Had the hon. Gentleman been less impatient and had he waited a few moments to hear something which I have to say about the compact car in America, he would not have had to make that intervention. I am sorry that I do not recall him warning the Government, but I accept that he did so.

Mr. Jones: It is on record.

Mr. Hocking: As I say, I accept that. I think I can satisfy the hon. Gentleman


in a few moments with regard to the question of the compact car in America.
I am pointing out that all these factors have contributed to the falling off of car sales. One has only to compare the figures this year with the figures for the same month last year to see that whereas nearly 15,000 cars were exported to the United States in October 1959, the number has dropped to almost 2,500 this year. While accepting that situation for the United States, if we look at, say, Denmark, which has not had a Presidential election but which could well be influenced by world tensions, we find that our car exports to that country have been reduced from 1,244 last year to 794 this year.
The figure of cars exported to New Zealand has dropped from 3,086 last year to 1,547 this year. We find that in South Africa the figure has dropped from 2,152 last year to 1,674 this year. While we are discussing the figures for South Africa, I would like to point out that not so very long ago it was put to me very forcibly by a motor manufacturer in Coventry that the difficulties in the South African market could to a considerable extent be attributed to the boycott policy suggested by the Labour Party earlier this year in connection with apartheid. He showed me letters from his agent in South Africa which suggested that some of the difficulties were a direct result of that suggested boycott policy.
I notice it has been suggested on a number of occasions that we should attempt to cultivate other markets, particularly those in the under-developed countries. I know that the African market is not a very big one, but in Ghana and Nigeria we have managed to maintain our level of exports this year in much the same order as last year. We exported 530 cars to Nigeria last year and have exported just over that number this year.
It would seem to me that the problem facing the motor car industry today is how to increase exports to other parts of the world. I believe that our manufacturers must concentrate to an even greater extent on the question of motor car design. It has been suggested that British cars are not satisfactory in some markets in Central Africa. I believe that that is something which can be over

come. I believe, too, that one of the benefits to be obtained from the new M.1 motorway is the fact that cars can now be driven in this country at very high speed over a distance of some 60 miles. All would agree that that is a tremendous test for any car, and I believe that in years to come it will have some effect on the design of vehicles.
We must pay more attention to the export market when considering the design of cars. It has been said that the Americans have now tooled up for the production of a compact car which will increase our difficulties in the American market. I do not accept that the American compact car is going to drive the British car from the American market. The Americans have considerable difficulties to overcome in the manufacture of small cars in the United States. They pay very high rates of wages—considerably higher than those paid in this country.
We must accept the fact that the labour content in the production of a motor car is by far the highest component. The material content is comparatively small. It stands to reason that to reduce only slightly the material content to manufacture a compact car as opposed to the large American cars would not greatly reduce the cost. I was told only the other day that the Americans do not think that they can bring down the cost of their compact cars to any considerable extent. It would appear, therefore, that we shall still have a chance to sell our vehicles in the North American market.
To sell those vehicles, however, we must considerably improve the sales organisations of our motor manufacturers in those markets. We must also ensure that there are better service and spares facilities. It is significant that the Jaguar motor company, which is not in my constituency but is in the constituency of the hon. Member for Coventry, North (Mr. Edelman), has not been on short-time working. It produces, as we all know, a very high-grade motor car. At the same time, however, it has a well-established sales network in the United States, operated by a company known as Jaguar Cars Incorporated (U.S.A.). That company has a large spares organisation and a big spares depot, I understand, on Long Island, New York. I understand that it also


works in co-operation with Leyland Motors, the company which has just announced some form of amalgamation with the Standard Motor Company, of Coventry. I hope that this amalgamation will go through, because I believe that it will strengthen the position both of the Leyland Company and of the Standard Motor Company in enabling them to export to the North American market.
We also should expect from the manufacturers more standardisation and more rationalisation of parts. This could well contribute to the sales of vehicles in the North American market. I know how difficult it is sometimes to obtain a spare part in this country. One Friday afternoon not so long ago, I was driving to the West Country. The vehicle ahead of me threw up a small stone, which shattered my windscreen. This happened when I was 35 miles from Coventry. I pushed the broken glass out of the windscreen and wondered whether I should return home and get a new one or continue on to Bristol and get one fitted from the distributors there. I decided to go on to the next telephone box and to make a call to find out. I telephoned home and was assured that there would be a windscreen in the distributors' garage at Bristol. When I got there, however, to my dismay I found that there was not a windscreen that could be fitted to my car, which was only two years old. If some of these components could be rationalised from one vehicle to another it would make it particularly easy for these things to be obtained in the export markets.

Mr. J. Silverman: The hon. Member has raised an interesting point about standardisation. Does he not think that that involves co-operation between the companies and that this is where the suggested working party might be most effective?

Mr. Hocking: I do not subscribe to the proposal for a working party. The National Advisory Committee, which has been working for so long, is doing the type of work which a working party would do. It has considerable experience. As my right hon. Friend the President of the Board of Trade said earlier, there has been a considerable measure of rationalisation. For example,

although the Rootes Group produces a large number of vehicles, the Hillman Minx, the Singer Gazelle, the Sunbeam Rapier and vehicles of that range, all have exactly the same body and, basically, the same engine. It is interesting to note from time to time that different vehicles have identical headlamps. They are made by one firm and sold to many manufacturers. There have been strides in rationalisation, but I should like to see it developed to an even greater extent, because this would considerably help us in overseas markets.
The Government should assist in the export of vehicles. I was pleased to hear my right hon. Friend say that the export guarantee schemes would help and that special facilities exist. I hope that these will be brought to the attention of the manufacturers to an even greater extent and publicised more than in the past.
It is, however, true that a strong home market can be the only basis for a good export market. Attention must be paid to the home market, although it has been bouyant so far. I hope that in the not too distant future attention will be given to enabling hire-purchase facilities to be operated over three years instead of two years. This would have a real effect and would help the industry to maintain production and to keep up sales in the home market.
In the long term, however, attention must be paid to Purchase Tax. I fully understand that my right hon. and learned Friend the Chancellor of the Exchequer cannot, in the near future, abolish Purchase Tax on motor cars. In present circumstances, it would probably be wrong to do so. [HON. MEMBERS: "Why? "] I explained in the debate on the Queen's Speech that I did not consider it a good idea to abolish Purchase Tax now or even to reduce it. [HON. MEMBERS: "Why?]

Mr. Cyril Osborne: Somebody has to pay for the Welfare State.

Mr. Hocking: The Welfare State was not my argument. If Purchase Tax were reduced now it would at the same time deflate the second-hand market to such an extent that car sales might well be brought to a halt. Instead of helping, that would hinder the sales of vehicles.

Mr. Edelman: Is the hon. Member not concerned that today in Coventry approximately 60,000 workers are on short time, which is the equivalent of concealed unemployment totalling 30,000? Does he not agree that the only way to put those men back into productive employment is to promote the selling of motor cars through the winter months, and that the most urgent shot in the arm which could do that is immediately to cut the Purchase Tax?

Mr. Hocking: I was not sure whether the hon. Member gave a figure of 16,000 or 60,000.

Mr. Edelman: Sixty thousand.

Mr. Hocking: I can only assure the hon. Member that, as in the previous debate on the motor industry, he has the wrong figure. I have in my hand a letter from the manager of the Coventry Employment Exchange, dated 5th December, concerning the number of persons working short time and stating that the figure for the week ending 3rd December was something in excess of 16,000. From that, I would presume that the figure was not as high as 17,000. The manager of the Coventry Employment Exchange goes on to state that a large number of vacancies are to be found in the Coventry area.

Mr. Edelman: Is the hon. Member not aware that the figure of short-time working is always taken on Mondays and for this reason pays no attention to short-time working in the course of the week? The latter is the relevant figure to determine the amount of short-time working. Surely the hon. Member is aware that in Standard's and Rootes' alone the short-time working is probably in excess of the figure he has quoted.

Mr. Hocking: I am fully aware that the hon. Member for Coventry, North has much more experience than I in these matters. He has represented Coventry, North since 1945. Nevertheless, I stand by my figures. I also know that during the last few weeks the figures in Coventry have been reduced. To suggest that Coventry is on short time to the extent that the hon. Member alleged does the city no service. Only this last week, Massey-Ferguson's have returned to full time and, indeed, to overtime. Last Saturday, that factory was working overtime in the production of tractors.
I wish to return to the point about Purchase Tax. I do not subscribe to the idea that it would be a good thing to reduce Purchase Tax now. I believe that ultimately it would be a drag on the industry and stop production of vehicles, or stop the sales of vehicles rather than promote them. But I hope that the Chancellor will pay attention to the reduction and the eventual abolition of Purchase Tax on motor cars over the years. I can well understand that there has been concern over short-time working in the industry. It is a natural concern on the part of management, distributors and constituents of mine who find themselves working short time.
I think true to say that we have not reached the saturation point in the production of motor cars in this country. There are still tremendous markets to be found in various parts of the world, and I am equally sure that unless we in this country expand our motor car industry in order that we may take our full share of these markets, when we can cultivate them sufficiently and when these people in various parts of the world can afford to buy vehicles, we shall lose a considerable part of the markets to our European competitors. I do not think that hon. Members opposite would be pleased if they found that the majority of the markets which are to be found in various parts of the world went to our European competitors.
In the past, the motor car industry has developed and expanded through its own enterprise and largely through its own initiative. I hope that we shall see the industry continue to flourish on those lines with the minimum amount of Government interference, and, I hope, with the minimum amount of political interference. It has frequently been suggested in the past that it would be a good thing to nationalise the industry. I am convinced that those who advocate the nationalisation of the motor car industry do it its greatest disservice.

5.32 p.m.

Mr. Frank Tomney: I am sorry that the Minister has now left the Chamber. He put his finger on a vital point when he said that we are dealing with an industry which has in its content an unplannable demand. That leads us to look at the factors in a planned expansion of no less


than £250 million. These are the factors with which we are concerned, and that is why this debate seems to have lost a sense of direction.
This industry has thousands of millions of £s of fixed assets behind it, and it employs on its boards very distinguished and powerful financiers. It has at its disposal the services of scientists, engineers, forecasters, economists, accountants, actuaries, technicians and skilled men by the hundred. It is in a position to say to Members of Parliament that it knows its own business best and who are we to interfere with the industry at this juncture because of what could be termed a small recession. We interfere for the good reason that big business is big politics and that is why we are debating the motor car industry today; to find out what is affecting it at the moment and how best we can seek to provide some remedies.
It is true judging from the disclosures we have had from the Government Front Bench, that the Government appear to know few of the answers and, indeed, few of the questions. That is not surprising, because earlier this year we were debating the Radcliffe Committee's Report on the monetary system of this country. I have read that Report five times and, frankly, I do not understand it even now. It passes my comprehension. There are, I think, few hon. Members who understand it. The Treasury did not understand it—and this is the financial system of the country. I sometimes think that the people who operate this system must have been born ten years old. The Treasury did not understand it, nor all the interlocking ramifications of the finance and industrial institutions in the country connected with the industry. This was not understood by the politicians, or, I should think, by less than a dozen of them. I sat through that debate absolutely fascinated, trying to work out exactly what was happening and where we were going.
I pose the same question in this debate, with the same humility. I have been delving into a document known as the National Institute Economic Review. It is a very responsible document which I consult from time to time because its articles seem to afford the balance necessary to political thinking. This time my

eye caught the objects of the Review which are listed on the inside of the cover:
The Review is intended to be of service to those in business and elsewhere who need to take a view of the general economic situation and prospects. The workings of the economy are not fully understood; and even if they were economic prediction would remain hazardous because of the impact of political events and technological development.
What a wealth is contained in those words as applied to this debate. In the motor car industry there is a £250 million expansion and reputable economists cannot say for certain what the future will be, and neither can the industry.
Many hon. Members in this House, including myself and my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), have said that this industry has been over-capitalised. I still think it is over-capitalised, and what is certain now is that whether we like it or not the industry is facing some new thinking which could mean rationalisation. What does that mean? Rationalisation involves jobs, men and unemployment. Most certainly the industry has staggered the country by its achievements, but those achievements have been based chiefly on the hire-purchase credit of the finance houses, which is not a very wholesome thing when viewed from the long term. Whether it is a good thing that people should purchase goods beyond their capacity to pay is an issue upon which future historians and sociologists will report. But since the start of the boom period in 1957 when we first heard the phrase, "You have never had it so good", one thing is certain and that is that we have never parted with it so quick. The hire-purchase debt soared from £200 million to £1,400 million in less than nine years.
What does this mean? It means that the industry is living on "tick" when it cannot forecast what political events will happen in other parts of the world. When I was a little boy in Lancashire and a member of a family living on a strict weekly budget we found it necessary to go weekly to the grocer's shop on the corner and ask for credit from Wednesday to Friday in every week. In a little frame in that shop was a sign which had a salutary effect on every body who walked into the shop. It said,


"Do not ask for credit as a refusal often offends". Such a notice is no longer to be seen in any shop. Now shopkeepers are shoving credit at people and are disgusted if they are offered ready cash. What kind of situation is this on which industry is based? It is over-capitalised, with demand in excess of future prospects. I do not believe that the future expansion of the industry will be justified.
I do not think it can be denied that no Government have the right deliberately to encourage their people to live beyond their means. It is the creation of false prosperity caused by creating artificial demand which brings in its train alternate depressions and booms, inflation and deflation, coupled with rising costs and fluctuating Bank Rate which should be avoided. It is also on record in various debates which we have had on economics and industry that other industries have suffered in foreign competition because they are not able to fulfil orders on time as a result of lack of labour while the motor industry has been hogging the available labour.
Out of this one thing becomes patently clear that, whether the Government like it or not, there has got to be a proper planning of the country's industry and resources. We are faced with a challenge—that cannot be denied—from behind the Iron Curtain. The Soviet Government have no gold and dollar problems. They can dig gold out of the ground. They have no problem of strikes by workers, for strikes are not permitted. They have a tremendous advantage in offering shorter or longer terms of credit. It is obvious that if that challenge materialises it will have to be met. In this country we have an ever-growing concentration of monopoly capitalists working in a patchwork structure of industry without a sound basis.
Imperial Preference is not the benefit to this country that some of us thought it would be. Our market is elsewhere. It is in the most populated areas. I mean the civilised populated areas in terms of social living. I do not mean the populated areas of South America, Malaya, India or China where, in the main, there is a peasant population. Certainly in future there will be industrial buyers and consumers there, but that is not so now. Between now and then

we have to live in very difficult circumstances of intense and growing competition. We have an embarkation problem of £250 million partly paid by the taxpayer.
Is the optimism of the industry really justified? I say categorically here and now that it would be wrong for us in this House to give the impression that the 1 million employed in this industry are merely suffering from the difficulties of Purchase Tax or credit costs.

Mr. Hocking: Is the hon. Member advocating a reduction in the size of the industry?

Mr. Tomney: If the hon. Member will listen to my speech he will hear what I am advocating.
We should not lead these people up the garden In my union association I have responsibility for many people employed in industry. In my opinion, this nation has as much hire purchase as it can digest, dependent as we are upon the economy of the United States. We should bear in mind, as the Minister pointed out, that that economy is in a period of recession which has been operating for three years. Even today, the United States steel capacity, the largest in the world, is using only 58 per cent. of its total output.
The United States has been our biggest market, but now, because of lack of demand for steel, its manufacturing industries are changing their processes and the models of their motor cars. That poses a special problem for us because they are manufacturing a small car—small by their standards, but as big as our Consuls, Zephyrs and Vauxhalls. That means that we have a smaller share of that market than we have a right to expect from past performances.
Every motor car company, with few exceptions, has felt this pressure. I shall compare the first half of 1959 with the first half of 1960. This did not happen in October or November, but in January to June. These are remarkable figures. The German figures are plus 14,000 on the previous target of 112,000 cars exported to the United States. The French are down 11 per cent., the Italians are down 31 per cent. and the British are down 21 per cent. The Japanese are up 3 per cent., the Czechs are up 72 per cent. and other makes are


up 36 per cent. Czech and other makes started from a very low basis. In this vital market B.M.C. in the first half of 1960 had a plus figure of only 1 per cent. and M.G. was minus 11 per cent. It had a production of seventy models a week as against a net output of 1,000 two years ago. Austin-Healey had a plus of 13 per cent. and Metropolitan a plus of 4 per cent. It has special arrangements with finance houses and motor car companies in the United States.
Ford was down 31 per cent., Hillman was down 39 per cent. and Sunbeam was up 167 per cent. Triumph was down 20 per cent., Vauxhall was down 39 per cent. and Jaguar was up by 1 per cent. There is a remarkable comparison when we consider the Common Market countries of Europe. Their percentage figures for exports to the United States are: Volkswagen, in the first half of 1959, 54,600, in the second half, 65,300, and, in the first half of 1960, 77,000, a plus of 41 per cent. Mercedes had a plus of 12 per cent. and Peugeot had a plus of 27 per cent. The figure for the Italian and Swedish cars was down in both cases by about 30 per cent.
We have a real challenge on two fronts. We are not in the Common Market and obviously shall not be allowed to enter. There is a potential market of £400 million. The Germans are in, but they are not exporting in great measure to the Common Market countries. Some 72 per cent. of German production is going overseas. There are lessons to be learned by both sides of the industry in this, and they have to start learning them quickly.
It is remarkable to see that the production of Volkswagen increased from 54,000 in the first half of 1959 to 65,000 in the second half. The number employed in the industry in 1949 was 150,000 and in 1959 it was 335,000. A small degree of increase in the manpower force shows a remarkable degree of rationalisation in the German car industry. In comparison with the number of man-hours spent on total production in 1953, 417·2, the figure for 1958 was 555. Whilst the capital turnover figures—and this is important—for the industry, according to the same source, the Federal Government's statistics, were in 1953 630 million Deutschmarks and in 1958, 11,639 million Deutschmarks. Therefore, the turnover

had more than doubled while the number of man-hours had risen by only 35 per cent. and salaries and wages had risen in the same proportion—1,020 million Deutschmarks in 1953 and 1,970 million Deutschmarks in 1958.
This gives a picture of what British industry will have to face not only in intense competition from behind the Iron Curtain but in intense competition from Europe. The motor car industry and the men employed in it must realise that all the assembly is not done in this country. There is a system in the motor car industry known as C.K.D. general knockdown, the uncompleted assembly of cars which are assembled overseas. Those employed in the industry must realise that not all cars leave the dockside fully assembled. Most of the revenue earned is earned from C.K.D. In France, the car output is in the hands of four manufacturers—Renault, Citroen, Simca and Peugeot. One thing which they have in common with each other is a joint pooling arrangement with other European manufacturers and in two cases with the United States, Chrysler and Fords, Fiat and Alfa Romeo.
Car exports were running at about 150 million cars last year. What is important in the Common Market economy structure, which is now going to work in an ever-increasing degree, is the amount of interchangeability between country and country that is being done to make cars more exportable to the importing country, for instance, Citroen cut the price of its two CV models from 4,500 to 3,650 Deutschmarks by using its Belgian assembly lines. The same picture is applicable to Italy. But it is when we come to the Commonwealth market, where we would expect by association of kinship or fellowship or trade that they would favour the United Kingdom producers, that we find that it is not at all so. As more countries become independent, they look round for new industries and the enlargement of existing industries, and this has led leading British producers to produce vehicles overseas at an ever-increasing rate. Commonwealth countries are now nearly self-sufficient in domestic production and the Imperial benefits to this country are declining.
All European and American manufactures, for example, are establishing in Australia. General Motors have an


arrangement with the holding company in Australia, which started in 1925, and it is now the greatest profit earner in Australian industry, whilst the United Kingdom's share of the available market fell from 80 per cent. in 1954 to 55 per cent. in 1959. West Germany's figure has risen from 10 per cent. to 25 per cent. So there is no guaranteed future for us on Imperial Preference in Commonwealth trade. It would not be so bad if, as the Minister said, it were a question of straight competition in achieving exports to the Commonwealth, but it is not. All these people are firmly entrenched now everywhere in the world on C.K.D. principles.
The Rootes Group has 13 assembly plants overseas, Vauxhall has 13 assembly plants and Ford assembles in nearly 20 countries. British vehicles are assembled in 30 foreign countries. Each of the big five has plants in Australia, South Africa and Eire. Four have plants in New Zealand, Belgium, the Philippines and Argentina. Two have plants in Denmark, Holland, Italy and Japan. There is one assembly plant for British vehicles in each of the following countries—Cuba, Egypt, Finland, Germany, Ghana, Hong Kong, Nigeria, Pakistan, Portugal, Singapore, Spain and Sweden. Then we talk about the participation of American capital in our industry! If we are to live at all against Iron Curtain competition we can only do so by the interlocking of the economic structure of the free world, one country with another, otherwise we shall never live. We must have a little reality about these things in the future. It does not matter where a man earns his living as long as he earns it.
We have very few markets in Switzerland, but we have an assembly plant in Thailand, while B.M.C. have an agreement with Hindustan Motors and Nissen Motors of Japan. In Japan, the Rootes Group has Hillmans manufactured entirely by the Isuze Motor Company under licence. The reason is that freight charges make it cheaper for a European manufacturer to build overseas, while cars exported in C.K.D. form attract less import duty. The value of British cars assembled overseas has fluctuated between £180 million and £210 million since 1955, other than in the United States and Canada.
What does all this mean? We cannot divorce the problems of industry from the population of the world and the people who want to buy our cars. Where are we to sell them? Shall we sell them in America against the American compact cars? If the Americans have to rationalise, they will. If they have to be more efficient, they will become more efficient. Or do we sell in South America to a largely peasant population? Or do we sell to India when the Indian Finance Minister has just put a further embargo on import credits? Or do we sell them in Russia? China will be an enormous market in the years to come and this needs looking at.
Sweden is self-sufficient. Canada is now grumbling about British cars being given preferential terms, because Canadian workers are unemployed. Is this £250 million expansion in the British motor car industry justified on what the Minister calls an "unplannable" market? If we cannot have a plannable market, how can we plan? We cannot sell cars to the Eskimos, because they have no roads. Let us look at the available market and decide to concentrate upon those things which will sell.
Many British manufacturers have been crying out for labour and capital for years and have been denied it because of the over-capitalisation of the motor car industry. The goods which we are skilled in producing—primary capital goods—are the goods which we ought to be producing in considering long-term economic prospects throughout the world. But they have been disregarded.
Let us consider commercial vehicle production. Some of our makes—Leyland in partioular—taze possibly the best in the world. There are long order books and long delivery dates. If any expansion is to be undertaken at this is where it should be undertaken—in commercial vehicle production. If a country is developing it does not need minicars running around; it needs lorries and tractors. Those are what we ought to be providing. We ought to tell the manufacturers their business and we ought to say that Government money will be spend only in those avenues of production which will bring the best long-term results to us. That means selling to countries which are not now


consumer countries but will become consumer countries.

Mr. C. Osborne: I entirely agree with the hon. Member in the very gloomy but realistic picture which he has put before the House. It is our duty on this side of the House to put these facts in front of what he would call management. What hope has the hon. Gentleman that the unions, who have to place these unpleasant facts before their members, will accept the conclusions of his argument?

Mr. Tomney: The unions have always been prepared to accept facts, pleasant or unpleasant. If the economic future of the workers is at stake and the rewards are balanced between the shareholders and the workers in equal proportions, there will be no lack of union good will throughout, but the rewards from the industry have to be shown to be equal and not flowing on one side. What has been happening is that vast profits have been made by the manufacturers, but even vaster profits have been made by the hire-purchase companies after a false, stimulated demand. Some economists have given a figure of £750 net income which a family must have before it can afford a car, although the number of cars on the roads of England suggests that many people are affording cars who have a lower income than that. Frankly, I do not know how some people do it, but it is done.
The industry must look at the problem realistically and on a world basis. It must decide to go for those things which other nations require. These will not be luxury motor cars and, in the main, they will not be passenger cars; they will be trucks, buses, diesels, tractors, caterpillar tractors, earth-moving machinery and equipment of that type. If we go for that market and get it on a basis of specialisation and quality, it will remain with us. The late Richard Stokes, formerly the right hon. Member for Ipswich, used to say that any damned fool can make a motor car, but that it takes a good mechanic and a good firm to make bigger, lasting capital goods for the world. It is the capital goods which we should be producing. If the Minister is prepared to go into further talks with industry on a basis of expansion without developing this other side

of the industry or giving it priority, we shall run into trouble.
We are committed as far as possible to the maintenance of full employment for the trade unions and the workers. It is no fun when men become unemployed. We ought to make sure in our deliberations to offer the best help and advice we can to industry, and that should be the foremost platform of any policy. The British working man is not antagonistic to changes. He will go along with industry, as he did between 1945 and 1950 to a remarkable degree. He will do so again. But he must be taken into the confidence of industry and his leaders must be taken into the confidence of industry. The problem must be fully explained. There must not be an expansion of the production of luxury cars merely for the sake of expansion. This industry is a vital part of the nation's economy, providing 25 per cent. of our exports. If industry adopts the policy which I suggest, then, whatever the problems, both industry and those in the Ministry will find that the British working man is not lacking in co-operation when it concerns his own stake in his own future.

6.5 p.m.

Mr. Leslie Seymour: I come from the Spark-brook division of Birmingham and I followed, as its Member of Parliament, an hon. Member who was a great friend of mine. We lived adjacent to each other, we worked in the same area and we spent many years together on the Birmingham City Council. He was a grand little man who regarded it as his first duty to help other people. I very much miss him and regret the passing of my friend, Percy Shurmer.
As so many people are living in my constituency who work for and in the motor trade, and as I have been engaged in the motor trade for nearly forty years, it is appropriate that I should first address the House on matters concerning the motor trade. I have been warned that my statements ought to be short, concise and factual in a maiden speech.
There is no doubt that the present position is serious for the motor and motor cycle trade, particularly at this time of the year, and also for the workers who make such various components as tyres, batteries, electrical equipment,


bumpers, window and door handles and radiators. All these workers are dependent on the motor trade, and they feel the pinch when there is a slump in the car trade. But to get a true picture of the present position one must reflect on the immediate post-war years when people, not only in this country but in most countries of the world, were eager to own a British-made car. As a result, there was a great demand for workers, both skilled and unskilled.
Coventry manufacturers and other firms did not hesitate to induce workers, by the offer of very high wages, to leave their present occupations and to go to work for them making cars. Toolmakers, sheet metal workers, polishers, platers, painters, electricians and fitters were all drawn away from other industries by this offer of such high wages. Even the increase in the price of a car by Purchase Tax did not stem the demand in the home market, and people all over the world wanted British cars. The demand far exceeded the supply, but the time had to come when this position would adjust itself.
The workers stopped at Coventry because of the high wages. I have read in the Press that the average wage in the car trade is £18 a week, but a considerable proportion of them average approximately £5 a day. Even on short time they are earning over £12 on a two-and-a-half day week, and about £20 on a four-day week, which is more than workers in other industries receive for a 42-hour week. No section of workers in industry has enjoyed higher wages or more overtime than workers in motor car factories.
I met a deputation of car workers in the House a short time ago. One of them complained that he was on short time. I said to him, "There are plenty of jobs vacant in Birmingham. Many industries are crying out for employees." To that, he replied, "Yes, I know all about that, but I cannot earn as much money there as I can in my present job." There are plenty of vacancies in Birmingham. For example, the city is short of 300 full-time postmen. Workers in the motor industry are not interested in such jobs, because the basic rate for postmen is at present £10 a week, with a maximum of £10 13s. for a six-day week, not a five-day week of 42 hours.
As I said, I am in the industry. I am a toolmaker by profession. I work in the stamped and pressed metal industry where wages are controlled by a wages council. Many of the parts made in my industry go to motor firms. It is interesting to see the last schedule of minimum rates, which is dated 29th July and fixes wages for a 42-hour week for various workers.
According to the schedule of the Stamped or Pressed Metal-Wares Wages Council, the highest-paid employee is a metal polisher. The salary of a Grade II man, who has had not less than six years' experience, is 177s. 6d., with a minimum for a pieceworker of 188s. The salary of a Grade III man, which means a worker who, in addition to having had six years' experience, is also an expert in all processes of both common and best work, or is a chargehand responsible for all work and order in the shop, is 188s. 8d.
Compared with workers in other industries, car workers have had a very good time. We must not forget that they have fixed their standard of living at an inflated wage level and just cannot afford to take jobs at lower rates.
The Chancellor of the Exchequer and the President of the Board of Trade, both of whom I have seen, have given much consideration to the present difficulties. I sincerely hope that they can give immediate help—particularly now just before Christmas—in this present crisis, but this help can be only of short duration. The salvation and the future of the motor industry will depend, not on Ministers, not on this Government or any other Government, but on the car trade itself. The car trade cannot exist on the home market alone. It must rely on the export market, where the industry now faces severe competition.
During the last five years the percentage of British cars has slumped from 38 per cent. to 25 per cent. of the world's car exports. In the early days we had the markets practically to ourselves, but other car manufacturing countries have increased their production. In the last nine years Germany's yearly output has increased by 1¼ million. In the same period, France has increased its output by just under 1 million. Italy has increased its output by 370,000. Italy also reduced prices.
No Government can guarantee full-time and overseas orders in the motor trade. They cannot compel the British manufacturer to sell his goods abroad, nor can they instruct the foreign buyer to purchase British cars in preference to those of our competitors. The people who determine the sale of British cars are the British makers, the British workmen and the British salesmen. The manufacturers of cars have shown by their vast building plans that they have confidence in the future, as I have.
This recession is only temporary. However, they must search for better methods of production in order to reduce prices if we are to sell against world competition and produce the type of cars that overseas buyers demand. As the hon. Member for Hammersmith, North (Mr. Tomney) said, it may be wiser to concentrate on vehicles other than cars. Efforts must be made to provide better service and delivery periods. The salesmen in the industry should embark on a more vigorous campaign to sell British cars in the export markets and particularly in underdeveloped countries.
The British workman can play his part by the various interests in the trade agreeing to agree amongst themselves; by the suppression of all unauthorised stoppages which do so much damage in industry; by accepting new and improved methods of production as a means of gaining more orders by decreasing prices and not by creating redundancy; and last but not least by seeing that a first-class product is produced.
To sum up, the future of the car industry can be secured by complete co-operation of all interests giving to each complete confidence. There will be a constant demand at home and British cars will be competitive in world markets if all sections in production null together.

6.20 p.m.

Mr. Frank Bowles: Those hon. Members who have sat through the debate so far have had the pleasure of hearing two maiden speeches. My hon. Friend the Member for Blyth (Mr. Milne) spoke as I thought most delightfully, and was duly complimented by the hon. Member for Coventry, South (Mr. Hocking). It is now my immediate pleasure to congratulate the hon. Member for

Birmingham, Sparkbrook (Mr. Seymour) on a speech to which we all listened with very great interest. He started by saying that he had been told that he should not be controversial. As he thought that he was being uncontroversial on this occasion, I am sure that we are all looking forward to hearing him on a later occasion when he is not so inhibited. Nevertheless, on behalf of hon. and right hon. Members, I have very much pleasure in congratulating the hon. Member on his maiden speech.
The hon. Member spoke of having received deputations at this House from his constituents. Since the depression in the motor industry started a few months ago, there have been a number of quite large deputations, from such places as Nuneaton, Coventry, Birmingham and Oxford, from the motor industry—and in one case from a colliery, but that has not become quite so important at the moment. Those deputations have put their worries in the present emergency to hon. Members, and it is important to realise how the ordinary men and women in the industry, their trade union leaders and their shop stewards, have confidence in us as their Members, and are using Parliamentary methods in the best constitutional way to try to rectify their grievances, which are great.
It may be that the hon. Member for Sparkbrook thinks that a drop of £5 or £10 a week is not all that serious if the worker only drops down, as a result, to, say, £15 a week. It may be that my imagination is clearer and more vivid than his, but if I had to drop my standard of living by that proportion it would be a most terrible experience. The hon. Member has been in industry since he was 14 years of age. He has now risen to the eminent position of managing director of a well-known firm, so he must have had some experience of working-class conditions and life and I hope that he will sympathise with the point that I am putting.
In their distress, these people came to Parliament. They believe that we can help them, and it is our duty to do everything possible to make sure that they are helped, not scorned, because it is very well worth remembering that there are always other methods open to angry workmen. Nevertheless, these people in


England, Scotland and Wales believe in our British Parliamentary institutions.
On the occasion of two of these deputations I had the honour to be elected to take the chair. The meetings took place in the Grand Committee Room off Westminster Hall and, as my hon. Friend the Member for Coventry, North (Mr. Edelman) knows, because he was present throughout both, they were very well attended. The hall was as full as the police would allow it to be, bearing in mind security, comfort and order. They were very good meetings, and one of them lasted for more than two hours.
Those people demanded of the hon. Members who were present that the Government should ease the credit squeeze and the hire-purchase conditions, and should reduce Purchase Tax on cars which, at 50 per cent., is a good deal higher than it is on other things—and is, I believe, 20 per cent. higher than the Purchase Tax in those European countries that have it.
People do not forget the boom conditions that were alleged to exist in 1955, just before the General Election of that year. They remember the great cries about prosperity and peace and the like. The present Government won the election then, but it was not very long afterwards—in 1956—that what many of us who have watched this system work prophesied actually came about. Restrictions were put on, the Bank Rate was raised, interest rates were raised, and in that year in the Coventry area we had no less than 50,000 men and women unemployed.
Those things are not forgotten, and there is a real suspicion in the Midlands, and possibly in other parts of the country, that the car industry, more than any other, is the shuttlecock of Tory political tactics. They play about with it whenever they think that it is time to have another General Election. The President of the Board of Trade has spoken about cycles or curves of depression followed by booms. In the old days it was alleged that we had the cycle every seven years, but in the early years of the century that was not a thing that concerned the Tories at all.
In the time of Liberal Governments the cycle was said to take seven years, but

under the gentlemen who are now In office things have been hurried up and we now have it every four years. It is quite clear that it is done for the purpose of breeding what I believe to be a false sense of security in our economic conditions at the particular time.
People do not forget the alleged prosperity at the end of 1958 and the beginning of 1959, followed by the General Election in October, 1959. There was no credit squeeze then. There were easy hire-purchase terms. What is more, I came across something that would have shocked my grandfather. We had bank managers running after workers in the car industry, telling them, "Don't go to the car-hire-purchase people, come to our bank. We will arrange an overdraft. I'll come to see you at your home at six o'clock this evening." I have known overdrafts to be arranged by bank managers canvassing on the doorstep.
I do not know that there is anything wrong in that but, as I say, it is a different outlook from that in which I was brought up. A bank manager in the old days would have said that it was naughty to have an overdraft, and that the sooner it was paid off the better. Bank managers put the wind up people in general even if they were only slightly overdrawn.
In those days it was not considered respectable to buy things on hire purchase. I remember, as will many, or most, hon. Members, a famous firm called "Mr. Drage", his great selling point was that his hire-purchase goods—mainly furniture—were delivered in plain vans. Now, of course, hire purchase is not frowned upon at all. I am not going into the morals of it—I do not know that I am entitled to do so—but I have always felt that it flows from a capitalist system.
About thirty years ago, there was Major Douglas and his Social Credit. Those Greenshirts, as they were known, saw even in those days that to enable the workers to pay for the goods they produced—because the workers were always paid less than the value of the work produced—they must continuously have injected into their pockets the wherewithal to buy the products of their labours.
That is elementary capitalism, and it has always been one of our criticisms of


that system. Indeed, I have always said that we shall never solve these problems as long as we have capitalism. I believe that in this industry, as in a great many others, the solution lies in proper socialisation. I have always said that—I do not trim on such matters—

Mr. C. Osborne: Does the hon. Member mean nationalisation?

Mr. Bowles: I mean whatever the hon. Gentleman likes to call it—socialisation, nationalisation, public ownership. I do not mind at all. What does the hon. Member like to call it? I am sure that he likes to use the word "nationalisation" because his Government have made such a dirty word of "nationalisation" that it suits him to use it. They are making a dirty word also of capitalism by the way they have been carrying on in the last nine years, but I think that this is the last period of office for them.
During the last election campaign, in 1959, I repeatedly warned anyone who cared to listen to me speaking on the street corners—it was such a lovely summer that we did not have to go inside—that the glorious situation that people were enjoying in those months before the election would soon disappear if the Conservative Party won. The Conservatives did win, partly, I think because they fooled some people who were, perhaps, doing very well.
It is interesting that some of the worst election results from the point of view of the Labour Party were in the West Midlands. I think that we lost seven seats in all. The hon. Member for Spark-brook represents one of them now, I think. We lost Meriden. We lost Yardley. We lost Coventry, South, and we lost Rugby. I think that, to some extent, it may have been a false sense of prosperity which lulled the people into voting Tory. I am sure that the Tory Party meant it to happen, and I think that it succeeded. It will not happen again.
I do not carry the figures in my head, but the motor companies are making tremendous profits. The shareholders are all doing very well. The workers, on the other hand, the people who actually make the motor cars and the profits, are, apparently, quite easily discarded when any sort of depression

comes along. I have a practical suggestion to make about profits. I do not know exactly what they are, but they seem to run into millions whenever the balance sheets are published. I should like to know what are the profits made per car, if it is possible to work the figures out.
I should like to know, also, what are the wholesalers' profits and what are the retailers' profits. In June or July of this year, I think it was, Vauxhall Motors officially allowed the company's retailers to cut the price of Vauxhall cars, and the price was cut quite a lot—£40 to £70, I think—but the retailers still had plenty to play about with in their pockets.
This is really rather interesting. If it is the general desire of the industry, the shareholders, the directors, the wholesalers and the retailers, to sell more cars, there is one thing that they might do. They might consider chopping off a good deal of their profit margins.

Mr. C. Osborne: indicated assent.

Mr. Bowles: I am very grateful to the hon. Gentleman for his agreement there. I find him very much more impressive when he agrees with me than when he interrupts me on other occasions.
As I was saying, the workers are very quickly discarded when a depression comes. It is surely quite out of date, a complete anachronism today, that workers in important industries such as this should be employed on a week's notice. I read a year or so ago that Walter Reuther, the leader of the American automobile workers, fixed up with the motor manufacturers in the United States for a yearly contract. I think I am right about that. This is very important. We are talking about trying to stop fluctuations in this industry and, I suppose, in others as well. Why not have a yearly contract? In other words, why should not there have to be a year's notice before a worker can be sacked?
If there were yearly contracts, there would be a good deal more planning and consultation between management and the workers and their trade unions, shop stewards, and so on, than there is now, when a man can be pushed off with a week's notice or a week's wages in lieu of notice. Probably this is not a new idea to our leaders in the motor


trade unions, but I put it forward again because repetition sometimes does some good. If boom conditions again arise in the industry, perhaps the workers' representatives will use the opportunity to say, "All right. You want to produce 1,000 cars a week from Standard"—or whatever it may be—"We want our men and women to have yearly contracts. Then we will come back and work for you." I am quite certain that we should find that that had a more stabilising influence in the industry than is produced by the present basis of a week's notice to sack a man.
There does not seem to me to be anything like enough planning by the Government. About a fortnight ago, I asked the President of the Board of Trade whether he would stop Rootes building another car factory in Scotland, having regard to the serious situation in the motor industry in the Midlands. I gather that my hon. Friends, quite naturally, have taken another view, and that they have been successful in persuading the President of the Board of Trade to place industries of this very kind on Merseyside, in Scotland and elsewhere.
But it does strike everyone else, apart from hon. Members who have a great deal of unemployment to worry about in their areas—sand Ministers, of course—as idiotic, that, when we have this great depression in the motor industry, we should be planning for a further £300 million—I think that was the figure mentioned by one of my hon. Friends—more investment in the motor industry outside the Midlands, in the North, on Merseyside, and so on. It really is not planning. It seems just idiotic. Possibly, the Government are a little concerned about the political situation in Scotland and on Merseyside, but, quite frankly, I say that it does not make sense, when there is such a recession in the Midlands, to go on spending like that.
I gather that the Government are to pay for some of this capital investment, even for some of Fords, even though that company is, or very soon will be, 100 per cent. owned by America. The Government are subsidising the motor industry to open up in other parts of the country in spite of the position left behind in Birmingham, Coventry and places round about. There is no sense

in it at all. Of course, the answer really is that the Government do not believe in planning. They believe in as much laissez-faire as they can get away with. They believe in capitalism. The result is unemployment and short-time working, and the workers are the victims. As I said before, I believe that the industry should be socialised.
In my constituency, we have an organisation known as "M.I.R.A.", the Motor Industry Research Association. I once had the honour of visiting this organisation and I know that other hon. Members here have visited it. It is doing wonderful research. I shall not go into the details now, but the effort is a co-operative one by the motor manufacturers and the Department of Scientific and Industrial Research. I was told the other day that the D.S.I.R. is the biggest contributor. I congratulate the Government on that, because it shows that they do appreciate the importance of research in the industry. The M.I.R.A. is working very hard. I do not know the details, but I am quite certain that, as the motor industry is all connected with it, those in the industry will be able to have assistance in overcoming the problems which face them here and abroad.
Yesterday, I took up for the first time a paper called the Weekly Post. I suppose that we all had a copy yesterday. I did. There was an article in it by Mr. Courtenay Edwards, in which he says:
… to my mind commentators in the industry itself are too ready to blame the recent set-backs on the hardening of the American market and credit restrictions. I would put forward these equally powerful reasons for the trouble:

1. The industry as a whole is too self-satisfied. It has become mesmerised by its past achievements.
2. It has concentrated too strenuously on the American market and neglected to do all it might to push sales in other parts of the world, notably Western Europe.
3. The Government has often, in trade negotiations with other countries"—

perhaps the Minister will deny this later, if he can—
let the motor industry down badly by its failure to insist on reasonable terms for British cars.
4. The motor firms still refuse to adopt really aggressive sales tactics of the kind which have enabled Volkswagen and Renault"—
which are nationalised, I think; at any rate, they were—
to build up their present strong position in world markets


Later in the article, it is said:
When you go abroad and meet motorists in countries like Switzerland, Rhodesia, France and Sweden, they always seem to have perfectly sound evidence of the way British car salesmanship often falls down on the job. It ranges from inept publicity to infuriating delays in the supply of vital replacement parts; from the snooty apathetic salesman in his glittering showroom to the industry's refusal to fall into line with universal engineering practice in such matters as the metric system and the kind of threads we use.
The article concludes:
If the industry made a mistake about small cars, is it not feasible that it may also be wrong about some of its other strongly held views? I think so, and it is partly because of its over-rigid policy outlook that I accuse it of being a bit complacent.
I support the Amendment. I read that article because what we want is a working party which will see whether what is said in it is well advised. I cannot judge. I can only speak of the unhappiness among my constituents. I am grateful for this opportunity of addressing the House, and I hope that the Minister will say something about research and the possibility of an inquiry.

6.40 p.m.

Mr. Martin Lindsay: I cannot be sure about these matters, but I suspect that, with the exception of the hon. Member for Dagenham (Mr. Parker), I have more workers in the car industry in my constituency than any other Member. Not only have I the Rover Company in my constituency, but workers go to Coventry on one side and Longbridge on the other, or across to Birmingham to body builders such as Fisher and Ludlow Ltd., or Mulliners or component makers such as Lucas or S.U. Carburettors. I am, therefore, naturally exceedingly anxious about the position of the motor industry. I can fully understand the anxieties of those who work in the industry and their families. I take the view, however, that we must look at the economy as a whole, particularly the balance of payments. Above all, the one thing which we must not do is anything which would make it more difficult for the export trade, because it is the drop in exports which has got us into our present difficulties.
The trend of exports in the motor industry is discouraging. In each of three of the last four months for which we have figures—and they go back as far

as June—the industry exported fewer cars than in the corresponding month last year. The same trend is beginning to occur in the export figures of commercial vehicles. What is more alarming is that this trend is reflected in the national export position. It may not have been palatable but I think that it was realistic when the President of the Board of Trade said today that, in his judgment, an industry such as this, which is geared to export 50 per cent. of its products when in full production, is bound to have upsets from time to time because it is so dependent on foreign trade.
However, what the hon. Member for Newton (Mr. Lee) said about booms and slumps and booms and "busts" in the industry was nonsense. The fact is that ever since the war the industry has had not more than three months on short time, and the hon. Gentleman admitted that the short time now is only 25 per cent. That is not a very high proportion of busts in the last fifteen years of this industry's activities.
I also think that it is fair to point out that, in an industry in which the average earnings on full time are £18 17s. 4d., which is just double what they were ten years ago—and no one can possibly suggest that the cost of living has doubled in the last ten years—such high earnings are some compensation for fluctuations which, on the downward side leading to short time and redundancies, led to more than three months short-time working in fifteen years up to the present. I accept that to ease—

Mr. Lee: In 1956, 50,000 people lost their jobs, let alone being on short time.

Mr. Lindsay: They were back in their jobs again in just over a month. I remember the situation very well. I am glad to say that they were back again in a very short time.
I was about to say that it is true that to ease the hire-purchase restrictions would help the industry, because it would get the secondhand market moving again. Few people are prepared to place an order for a new car until they can get what they consider to be a reasonable price for their old one. However, to ease the hire-purchase restriction would, as my right hon. Friend said, have a wide effect on the


economy as a whole. Much as I should like to see special measures taken to help the motor industry, I think that one is bound to take the view that at present it would be wrong to show a green light to encourage another spending spree which would have only one effect, namely, demands for more wages.
If the A.E.U. had not tabled its present wage demands, it might have been very much easier to make some H.P. concessions.

Mr. Cyril Bence: rose—

Mr. Lindsay: I hope that the hon. Member will not be long, because I have promised not to speak at too great a length.

Mr. Bence: But what the hon. Gentleman is saying is important. Does not he appreciate that, if the present situation goes on for very long, the resultant fall in the output of units from the motor industry will inevitably force the motor companies to put up their prices, which would make the position worse?

Mr. Lindsay: I appreciate that, but it is not nearly so big a factor as it is sometimes thought to be. It is, however, a factor.
I am deeply anxious about continual wage demands in the motor industry. It is possible that some branches of the engineering industry—perhaps the machine tool side—can afford an increase in engineers' wages. But if we are to revive and sustain the motor car export trade, our prices must be competitive. The plain fact is that we have already priced ourselves out of a number of markets, particularly in Western Europe.

Mr. Bence: indicated dissent.

Mr. Lindsay: The hon. Gentleman shakes his head, but this is the view of people whose livelihood depends on selling British cars abroad.
It is easy for the Opposition to press for reductions in Purchase Tax and easement of the hire-purchase restrictions, and so on. I make no complaint about that, but they have not the responsibility for these matters. I recognise their sincerity and deep anxiety about the industry, which I share. In my view, there is one way in which hon. Members opposite can give tremendous help to the

motor car industry, and that is to condemn in the most forthright terms unofficial stoppages, which are doing the industry so much harm.

Mr. Bence: How many are there? How many hours are lost?

Mr. Lindsay: It is not possible to get overall figures for unofficial stoppages for the industry as a whole—at least, I have not succeeded in getting them—from the Ministry of Labour or from the Society of Motor Manufacturers and Traders. I can, however, give the figures relating to the Rover Company, in my constituency. This is a very well managed company—

Mr. Bence: indicated assent.

Mr. Lindsay: I am glad that the hon. Gentleman supports this—in which the greatest possible care is taken over the welfare of the workers. Every attempt is made to keep labour relations as sweet as possible and to meet all reasonable demands from the shop floor.
I think that the figures for the Rover Company will stagger the House. Since the beginning of this year, it has lost 250,000 man-hours in unofficial stoppages. That is equivalent to 2,500 men losing 100 hours' production, which is two-and-a-half weeks' work. To my mind, these are appalling figures.
Let me give the House an example of one of these types of unofficial stoppage. The other day, 124 men, earning over £23 a week each, were held up in production through no fault of their own. They were paid for this lost production at the rate normally paid by the Company. However, they asked for a special make-up and this was refused by their superintendent. Without even waiting to see the production manager, these men walked out. As a result, 1,500 of their fellow workers had to be laid off. The Company lost the production of 1,100 vehicles, 75 per cent. of which were for export, and the actual difference to these men would have been 1s. 7d.
All I can say is that such feckless, reckless behaviour as this makes one despair of trying to help the industry. One would think that these men had no desire but to keep themselves permanently on short-time and have redundancies. I mention these examples because they come from the company which I know best, not because their


record is any worse—in fact, I believe that it is much better—than that of some of the bigger companies such as B.M.C., Rootes and Ford.

Mr. Bence: It is better than most.

Mr. Lindsay: I am obliged to the hon. Member.

Mr. Bence: The three big American companies are the worst in the world.

Mr. Lindsay: The greatest help that hon. Members, and particularly hon. Members opposite, can give the industry is to condemn such feckless behaviour in the strongest way they can. All these types of stoppage put up the cost of production and make it infinitely more difficult to lower export prices and to keep the men in work.
The men who run this great industry are full of confidence that their plants will all be back an full-time work within two or three months. They are backing their judgment with many millions in their development programmes, none of which is being cut back. When we look at our export difficulties in country after country around the world, one is bound to wonder whether this optimism is justified. All one can say is that this is a matter of commercial judgment, not of political judgment. Therefore, one must trust the leaders of the industry and hope that their judgment will be fulfilled.
My view is that, much as I should like to see special measures taken to help the industry, I believe that the Government are right in the view that they are taking. I believe that, with the confidence in the industry itself, and, above all, of the necessity of not encouraging wage demands by encouraging more spending, which would make the export position much worse, the Government are taking the right view in giving no special help for the industry at the present time. This, I believe, is, above all, a time when the national interest must be put before party considerations.

6.54 p.m.

Mr. Maurice Edelman: I welcome the opportunity of following the hon. Member for Solihull (Mr. Lindsay), whose sincerity and, generally speaking, non-partisan approach to the problems of the motor industry are such that I admire. I dissent

wholly, however, from the hon. Member's conclusions, and I will endeavour to show why. In the first place, although with the hon. Member I deplore unofficial strikes of the kind he has described, I am certain that he has exaggerated the problem and its extent.
Only today I was talking to a responsible person in the trade union movement—I would quote his name had I his permission to do so, but I assure the House that he is a most responsible person—who told me that the average figure in the motor industry for loss of time through both unofficial and official strikes was six hours per man per annum. That figure contrasts strangely with the figure, which I accept, given by the hon. Member. I can only assume that the small local difficulties which are experienced in Birmingham do not illustrate the picture of the problem of the industry throughout the country.

Mr. Bence: I assure my hon. Friend that for years in the motor industry, the biggest factor in hold-ups was not strikes or even sickness but men waiting for materials to deal with faulty batch deliveries.

Mr. Edelman: I am obliged to my hon. Friend.
I should like to move on to wider considerations. The most important of these is the urgent problem which today faces the industry. When I heard my hon. Friend the Member for Nuneaton (Mr. Bowles) speak about our constituents who came to lobby us, I felt that he was introducing into the debate a breath of reality. What is going on in the Midlands, in Coventry, Nuneaton and Birmingham is something which has not been experienced since 1945. Despite the brief setback in 1956, today's recession is of a totally different character.
Today, there is mounting redundancy and a steady increase in short-time working. We must face the fact that the prospects of the industry and of the workers through the winter, at least, are extremely bad. Although I will not go into details of the numbers on short time, it is obvious that thousands of men are today working short time. There are thousands of men whose unemployment is concealed. Consequently, if we look at the broad picture of short-time working and of unemployment and, what is more in the


present period of recession, of workers in the industry being bought and sold by take-over bidders as if they were plantation workers in the deep South in the eighteenth century, we must accept that there is something radically wrong with the industry.
Our debate falls naturally into two parts. There is the question of what the Government are doing about the immediate problems of the workers who are unemployed or on short-time. Various suggestions have be put forward. From time to time, in common with a number of my hon. Friends who have expressed the opinions of the trade unions concerned in this matter, I have urged that there should be a cut in Purchase Tax. The reply from the Chancellor of the Exchequer has always been that this would undermine confidence until the next Budget and that our claim that there should be a cut in Purchase Tax merely means that people would refrain from buying. That danger is inherent in the claim at any time that there should be a cut in Purchase Tax.
The situation today is that unless cars are sold on the home market, which is the only market immediately available, short-time working and unemployment will continue. Unless dramatic action of the kind we suggest is taken, which would encourage people, not in three months' time but immediately, to start buying cars, redundancy and short-time working will be progressive.
I asked the Chancellor of the Exchequer the other day whether he had done some arithmetic and made any kind of comparison between the prospective loss to the Revenue, which the President of the Board of Trade mentioned again today, if there were a cut in Purchase Tax and the amount which he certainly will have to pay in unemployment benefit between now and the Budget unless he cuts the Purchase Tax. The Chancellor's reply was that it was irrelevant.
Even if we accept that a cut in Purchase Tax would, in effect, be a concealed subsidy to the motor industry and to employment, the question remains whether it is not better to give a concealed subsidy to maintain employment rather than to give an overt subsidy in the form of unemployment benefit to those who have been made unemployed

or are working on short time as a result of Government policy. That is the immediate question. I would join with my hon. Friends in urging most strongly that now, before the next Budget, in order to prevent ever-lengthening queues of unemployed and men working on short time, action should be taken. It can and should be taken now, otherwise the figures will grow unnecessarily.
Comparisons have been made with the brief recession in 1956, but we all know that the present recession is of a totally different kind. I agree with the hon. Member for Solihull that since 1945, thanks to the planning of the Labour Government, the motor industry has done through a period of spectacular affluence. Thanks to the pressure exercised by the late Sir Stafford Cripps, the motor manufacturers were directed—and I use the word "directed" advisedly, because they were very reluctant—to go into the export market. Because they went into that market it was possible to have flourishing exports, especially to North America, and there was always the cushion of the home market on which to fall back.
I suggest that now is precisely the moment when the home market should be used as a cushion for employment. Although it may be said that any fiscal measures taken will single out the motor industry for help, surely it is right to single out for help the industry which today is suffering most. Although I listened with the greatest interest to the long-term diagnosis of what is wrong with the industry and what prescription should be applied to cure it, I could not help thinking that when a man is bleeding to death one does not put him through a long routine of X-ray examination and so on but one applies a tourniquet to stop the bleeding. I hope that I shall not be accused of exaggerating when I say that the state of the industry is steadily deteriorating.
From time to time Front Bench speakers opposite, and I am thinking particularly of the late Parliamentary Secretary to the Board of Trade, make statements to suggest that motor manufacturers know best. Those statements, of course, find an immediate echo from the Government back benches. We have only to look at several statements put out by manufacturers in recent times.


Last year, Lord Tedder forecast a production of 180,000 a year by the Standard motor company by the end of 1960. What is he reported as having said this morning in connection with the Leyland take-over bid? It is:
A very sharp and adverse change has come over that section of the industry in which Standards is engaged.
As for Mr. Alick Dick, the managing-director of the Standard company—

Mr. William Shepherd: Is it not grossly unfair to this industry not to say that the hon. Member and I thought three years ago that these expansion programmes were not justified but that the industry has proved up to now that they have been justified? The hon. Member should give credit to the men who took the chance.

Mr. Edelman: I am testing the veracity now of what has been said by manufacturers by quoting these statements. I want to set off what was said by spokesmen on the Government Front Bench against what has been said by Mr. Alick Dick. He said:
I believe that it will be two or three years before the motor industry becomes profitable again.
The implications of that are very serious.

Mr. Hocking: The hon. Member is talking about the Standard motor company. He must be aware that at present Standards are selling as many cars as they were selling in the same period last year. They are working a two-and-a-half day week at present whereas last year they were working a full week, yet I am told that production and sales are precisely the same as they were last year.

Mr. Edelman: I am glad that the hon. Member has mentioned that point, because it is related to the attack made on workers in the industry. Perhaps I may quote some figures in that connection. In 1950 there were 300,000 workers engaged in the industry. By 1959 the output had doubled, to about 1 million units a year. The number of extra workers employed was only 50,000, which illustrates quite dramatically the contribution made by the workers, in conjunction, of course, with progressive automation of the industry. I would

not wish to be critical of a maiden speaker, but when the hon. Member for Birmingham, Sparkbrook (Mr. Seymour) spoke about the high earnings of motor industry workers, it should have been said that we ought to be thankful to those engaged in the industry who, by their energies, techniques and skills were able to account for the tremendous drive into the export markets and to provide for that tremendous contribution made by the motor industry as a whole to the national economy.
I believe that we are now facing a crisis different from any that we have faced since 1945. The illustration of that fact is that home market sales are still pretty high, but the immediate cause of a falling off is the decline in exports to the North American market. I do not want to discourage optimism, except when it leads to false hopes and illusions, but, despite the optimism of the motor manufacturers, I do not believe that it will be possible under present arrangements to capture the North American market in the way it was captured before.
It has always been perfectly clear that at the moment when half a million motor cars were imported into the United States and as soon as that became a steady factor in the United States economy and American motor manufacturers themselves began to feel the pinch at home they realised that they would have to come out and fight against European exporters into the United States. They would be able to do it in two ways—either in the traditional way of raising the tariff or by going for what Mr. Ford called "intensive competition", which is clearly designed to drive European exporters out of the United States market. I believe that with the compact cars produced by the Americans we are only entering that stage and that by 1961, 1962 and 1963, when our full expansion plans come to fruition, the American expansion plans will also be driving at their maximum power.
One effect of this great outward pressure of the American motor industry has been the onrush of that industry into the British market, and the take-over of Fords is only one illustration. I was very glad this morning when I woke up to find that Leylands had taken over Standards—for only one reason, and


that was that there had been rumours, and many of these rumours had certainly been based on fact, that American interests were angling to buy up the Standard company. At one time Chryslers were certainly interested. The general expectation was that in the complex of motor manufacturers, Standards, as the weakest of the big five, would certainly be taken over before long by American interests.
We already know that more than half of the British motor car industry is in American hands and Americanisation is progressing. Consequently, I find it strange when hon. Members, like the hon. Member for Louth (Mr. C. Osborne), deride the prospect of nationalisation of the British motor industry and speak of it as if that were really the ultimate disaster. I am surprised that hon. Members opposite who attack nationalisation so fiercely have not the same passion when it comes to the Americanisation, of the British motor industry and the take-over of the industry into control which operates not from Westminster or from the great centres of the motor industry in this country but from Detroit and New York and all those places where American capital acts in order to extend its influence.
I must say, therefore, that today, looking into the future and the future development of the motor industry, I most firmly endorse what my hon. Friend the Member for Newton (Mr. Lee) has proposed about a national working party. I think it is time that we in this House took steps to examine very carefully where the motor industry is going. Every one of the big five has its expansion plans which, as we have heard, add up to about £300 million, and each of them has gone in for that expansion on the assumption and with the hope that they are going to capture the whole of the cake for themselves. So they have planned these great investments in Scotland, in Wales and in Liverpool with the idea that, somehow or other, by some natural order of things, by some mystical process to which the President of the Board of Trade seems to be addicted in his thinking, by some sort of spontaneous combustion, the motor industry is going to enter into a period of natural and inevitable expansion.
I do not believe that to be the case at all. Indeed, the industry has expanded during the years in the same way as the telephone service has expanded or the television industry has expanded. We have developed new vehicles and new techniques, and that has inevitably brought more and more customers. I have no doubt that in future there will be a great and widespread demand for motor cars all over the world. But unless production is related to the demands of the consumer, or unless we take steps by means of credit, for example, to encourage those consumers with whom we are associated to take our products, then indeed we shall have a disorderly, distorted and chaotic expansion of the motor industry which will only lead to misery among those engaged in it.
May I put to the President of the Board of Trade one positive suggestion? It is quite clear that part of the prosperity of our society and part of this general affluence has been due to the fact that we have been selling manufactured goods dear and buying primary products cheap. That has been the basis of our affluent society. May I suggest to the President of the Board of Trade that in connection with the motor industry he might consider the possibility of making bilateral agreements with certain of the primary producing countries to pay more for their products in order to encourage them to make specific contracts to buy our motor cars? That seems to me to be a specific proposal worthy of consideration, and I believe that, despite that, it is something which could be done.
I will conclude by saying that we should have a national working party in order to examine the state of the industry and its future prospects. I believe that, looking ahead, we shall not solve any of the ills of the industry unless there is some sort of international agreement or international planning as to the type and size of the cars which are to be made. If we are entering a period of pure laissez faire expansion and competition, the situation will be disastrous, and the prophecy made by Mr. Dreyfus, of Renault, that in ten years' time there will be only five major producing companies in the whole world will be realised, and many of the companies, and more importantly their workers,


will have suffered gravely in the meantime.
Mr. Dreyfus, in his most admirable speech, said that the only way in which the motor industry of the world could develop its potential capacity to satisfy the expanding market, was by initiating a division of labour. His proposal was that the West European countries should concentrate on producing the traditional small cars, while America should concentrate on medium-sized cars, and in that way we could have a division of labour which would, in a sense, be a cartel, but in which there was an association of Government and trade unions in order to make sure that a cartel of that kind would work to the general advantage.
That is to look ahead. What I say now and what I charge the Government with is that they have failed to take steps to prevent the growth of unemployment and short-time working in the motor industry. I believe that they have failed to carry out their pledge to maintain full employment, because they have had the fiscal means of control within their power which would have enabled them to stabilise unemployment and cut out short-time working, and carry the workers through the winter. Because of that, they stand condemned, and I hope and believe that they will be condemned by the whole country.

7.15 p.m.

Mr. C. M. Woodhouse: The depressing thing about this debate is that it seems to me virtually impossible to say anything entirely new about the motor industry, though the hon. Member for Coventry, North (Mr. Edelman) has certainly done his best. With a few exceptions, practically everything possible has been said already, and as practically all of it is true, it seems that practically nothing can be done about it.
I think it might still do some good, both to the industry and to the nation, if some of the truths that are uttered from the other side of the House found an echo on this side, and if some of the truths uttered from the Treasury Bench were recognised by the Opposition, who I feel sure would be saying very much the same thing if they were in power today.
Speaking for myself, and I do not believe that the motor industry generally would disagree, I would personally welcome the examination of the future prospects of the motor industry by a working party, although I feel somewhat uneasy about some of the implications which seem to lie behind that idea on the other side. I do not see how a working party of the kind that I could welcome would differ, either in composition or operation, from the bodies which already exist, and to which my right hon. Friend the President of the Board of Trade referred in his opening speech. I am certainly not going to urge the Government prematurely to take the action which we all know they are going to take sooner or later in relaxing the credit squeeze on the home market, because the Government must be, and alone can be, the judge of the right time to do that. But I feel that it is reasonable to suggest to the Government that in future they should be prepared to accept rather more responsibility for some of the consequences of the sort of action which they were obliged, for very good reasons, to take earlier this year.
Every hon. Member of this House who represents motor industry interests has seen these consequences. We have seen them in idle machines and in piled-up stocks, but most serious of all in short-time working and, sooner or later, in actual unemployment. The Government can, of course, and will and do point to other industries and other parts of the country, where people are crying out for more labour in order to fulfil important export contracts, and the implication is that the under-employed motor workers ought to go where they are wanted.
In a constituency like mine, dominated as it is very largely by a single industry and its ancillaries, I think that kind of argument might correspond to economic logic, but it does not correspond to human nature. A man who has recently established himself in Cowley, induced by the prospects in the motor industry, cannot just uproot himself and go work somewhere else, especially when he knows that if the industry picks up again, as we all hope and believe it will, in three or six months' time he will be wanted back again in Cowley. Nor will any alternative employer want to take on men on this sort of terms.
If, as we have been told this evening, in so vigorous, competitive and also volatile an industry as the motor industry, short-time working is from time to time inevitable from all sorts of automatic fluctuations—and I emphasise here that I am talking only about short-term setbacks of a few months' duration and not about a long-term recession, then in these circumstances it seems to me that it should not be impossible to devise some mutually agreed way of mitigating or insuring against the personal hardships which that brings about.
The motor industry may be bound to have its ups and downs—I do not doubt that it is—but surely there need not be such huge precipices between the peaks and troughs for the workers. It should not be impossible to find a way of ensuring that during these short-term setbacks—and I repeat that I am talking in terms of months—workers' wages should fluctuate less precipitously, between less extreme limits, not between £18 or £20 to £7 or £8, but from a rather lower maximum to a very much higher minimum.
Of course that would entail negotiations between employers and trade unions and it would not be easy—I do not imagine that it would—but the Government do not have the right to say that it is exclusively a matter for the employers and the unions to sort out on their own, because when the Government are themselves in part responsible—and I emphasise in part—by measures which the national interest makes necessary, then, just for that reason, they should accept responsibility for taking some initiative in bringing about a mitigation of the consequences. The trouble is that, although the Government are in part responsible, they are only in part responsible. Other factors are at work over which the Government have no control and which they cannot cure by the kind of measures to which the home market is susceptible.
What many of us fear, and it is a fear which has been expressed on both sides of the House, is that the roots of the industry's problem which lie overseas are deeper and more intractable than that. Everyone agrees that the future of the industry stands or falls on its success with exports. Everyone knows that we cannot compel foreigners to buy our motor cars and that the competition is

getting severer all the time. Every exporter will say, as we have been told more than once tonight, that the surest condition of a strong export trade is, a strong and large home market behind it.
Yet the tragic paradox of our present economic situation is that when our exports are doing badly the first thing we have to do to rectify them is to punish the home market and, even then, we have found this time that our exports are not really doing any better even when we punish the home market.
Nor is it surprising that our export trade is no longer doing as well as we would like. Competition is severer. Countries to which we used to sell our motor cars are now manufacturing their own. Under-developed countries are certainly an important potential market, but they are mostly countries whose main potential lies fairly far off in the future. Probably, the only really important expanding market for our engineering industries at the moment is in Western Europe.
In our single-minded preoccupation ever since the war with the problem of exports, every successive Government has to some extent failed to take sufficient notice of the most important development in world trade which has happened since the war, which is that the biggest expansion has been not in the export trade but in domestic markets.
To take the biggest domestic market of all, the internal trade of the United States of America is now some three or four times as great as the whole international trade of the whole world put together. That is why the concern of the United States about exporting is no more than marginal, and the fact that the United States is at present facing a balance of payments crisis is irrelevant in this connection, because its balance of payments problem has nothing to do with an adverse balance of trade. Even our own trade in our own domestic market is at least three times as great as our foreign trade overseas, and it is from the United States that the inspiration of the European Economic Community has sprung.
In a very large domestic market, with no tariff barriers and no other internal economic obstructions, so the argument runs, one's economy is stronger, one's dependence on exports is less crucial, and, incidentally, one will probably get


a more flourishing export trade into the bargain without having to worry so much about it. This argument should apply just as much to this country as to any country in Western Europe, and it points inexorably in the direction of our seeking to amalgamate our domestic market with the only other market in the world which would really suit us in present circumstances—the European Economic Community—so as to create for ourselves an internal domestic market of between 200 million and 300 million consumers instead of the mere 50 million which we now have.
I am well aware that this is an extremely controversial matter which has been canvassed many times before. I am well aware that someone will have a difficulty for every solution. I am aware of the objections from the point of view of agriculture and horticulture. I am aware of the objections from the point of view of social and welfare policy, from the point of view of Commonwealth relations and national sovereignty, and I am well aware of the fact that there is a good deal of reluctance in the European Economic Community to let us in. I am also aware that there are and must be innumerable practical difficulties of which no one who is not in Whitehall all day and every day can possibly be aware.
I will say only that I have never been convinced that all those difficulties are insuperable. I am not doctrinaire in these matters, and I have come to believe that in the long run such a merger of our markets is the only possible solution for our industries and that the longer it is postponed the harder it will be to bring about.
The only way to join a club is to start by declaring a wish to join it and not to go sniffing around the back trying to find a comfortable semi-detached annexe. If one joins early enough, one will have the opportunity of moulding its institutions and framing or reframing its rules, which have already been riddled with exceptions by existing members. But if one does not do so, or if one leaves it too late, I greatly fear that the outlook for our exporting industries and the motor industry in particular is a long slow decline from which there will be no return.

7.27 p.m.

Mr. Frank McLeavy: Whatever may be the differences of opinion between the two sides of the House about the short-term and long-term prospects of the motor car industry, I am sure that we are all deeply sympathetic towards the manufacturers and workers in the industry in their present situation. Whatever the difficulties of the moment, we all hope that the recession will soon pass away and that the industry will return to full employment.
The achievements of the industry have been mentioned, and it is only fair to pay tribute to it for having made such a substantial and welcome contribution to the volume of our export trade. The high standard of craftsmanship throughout the industry has become well known all over the world.
It is our duty in Parliament to try to get the Government to recognise the industry's tremendous importance in the economy and to persuade the Government to come temporarily to its rescue in this difficult period of recession. We must look at the size of the problem. I thought that the President of the Board of Trade made rather light-hearted references to the unemployment problem, as though it were of no great importance or magnitude. To get this on the record, one should give some figures about the various short-time workings so that hon. Members who listened to his unfortunate speech may have a better appreciation of the representations we are making that this unemployment and short time should be dealt with more urgently.
The Financial Times estimated recently that at least 108,000 out of 442,000 workers in the industry and ancillary industries—nearly one in four—are on short time. I am told by trade union officials that, if anything, this was an underestimate. The majority of the employees of the main manufacturers are on short time. In addition, firms outside the industry which supply it have also been affected.
The Dunlop Rubber Company has put 4,000 of its employees engaged on tyre production on a four-day week. The Triplex Safety Glass Company has put 800 workers at its Birmingham factory on a two-and-a-half-day week. Pilkington Bros., which has glass works at St. Helen's and Doncaster, has suspended


overtime for thousands of workers and has put some on short time. British Timken, Ltd., maker of ball bearings, has put 330 workers on a four-day week at its Northampton factory.
In the motoring industry itself, during the last two weeks there have been startling and alarming developments. Fords has 18,000 men on a four-day week at seven plants, including Dagenham, Doncaster and Leamington. Lucas has between 10,000 and 20,000 on a four-day week, mainly in Birmingham. In addition, thousands of part-time workers, and nearly all those of pension age, have been dismissed.
Standard Motors has dismissed 2,000 men at Coventry and more than 1,000 at its Birmingham subsidiaries, and 100 at the new Liverpool factory. It has also discharged 250 staff employees, including 78 draughtsmen and seven scientific workers. That is significant from the point of view of future development. The remainder of the Standard employees are on a three-day week.
Thousands of workers at Rootes at Coventry are on a three-day week. Pressed Steel at Oxford has discharged about 1,000 men, and nearly 10,000 of its workers are on a one-and-a-half or two or three-day week. The same firm at Swindon has dismissed 1,100 and the remainder are on short-time.
I could go on citing more cases where the recession has caused serious unemployment and short-time working, but I have said sufficient to show that, despite the complacency of the Minister and the apparent indifference to all this short-time working and sacking, this problem is very serious. It is the Government's duty to realise that in the interests of our economy, of the industry itself and of the workers engaged in it something should be done speedily to give some assistance.
I want to pay tribute to the manufacturers. I and my union colleagues in the industry believe that they are trying not to engage in large-scale dismissals before Christmas, but my friends among trade union officials are concerned about what may happen in the New Year. It is suggested to me that the cut-back in production appears to be worse than in the crisis of 1956, with much less apparent prospects of a revival.
All these facts call for immediate investigation. Unions representing the workers in the industry believe that the serious impact that this recession will have upon the economy of the country and its serious effect on employment in other sections of industry are such that the Government, instead of merely allowing the position to ride, should take immediate action.
What are the long-term objectives? The first is to get a stable level of production. In my opinion, and that of many of my friends in the industry, the present plans to extend production in Scotland and other development areas require re-examination in the light of present circumstances. We must bear in mind that these new enterprises were based upon an estimated 10 per cent. annual increase in the output for the next five years. This does not appear realistic in the present situation. In some ways the motor car industry is like the coal industry. Faced with ever-increasing production, the problem is to find a steady and stable plan of production.
I have a few comments to make on the European market. The Government have done precious little to help the sale of cars in the European market. While many of us would object to any discrimination against the Commonwealth in order to achieve co-operation in the European market, we still feel that much could have been done by the Government to increase the sale of British cars on the Continent. The plain fact is that unless we substantially increase sales in Europe we cannot hope to maintain fult employment in this industry.
Whatever may be the future long-term plan, to deal with the short-term problem the Government must take immediate action to stimulate the home market. In spite of what the President of the Board of Trade said about the Government's refusal to deal with credit facilities and Purchase Tax, I consider that the circumstances prevailing today justify the Government taking immediate action.
There are many ways in which the Government could help. They could ease the hire-purchase term by spreading the payments over a longer period. The President of the Board of Trade said, "We are thinking about it"—or something to that effect—"but we are not going to do it now.


We may do it later." Whether that means in three months, six months, or twelve months no one knows, but in our view the Government ought to do it now, because to do so would be of tremendous temporary help to the industry.

Sir John Barlow: The hon. Gentleman suggested that the Government ought to do a great deal more to help the sale of cars in the European market. He passed over that rather lightly. Would he be more explicit and suggest what the Government could usefully do?

Mr. McLeavy: I am sorry, but the hon. Gentleman has allowed me to pass from that point, and if I return to it now I shall cause considerable annoyance to the hon. Members who wish to follow me. I therefore propose to leave it. If the hon. Gentleman had asked his question at the time when I was dealing with the point I should have been very happy to deal with it.
The Government say that they are not prepared to do anything about reducing Purchase Tax. I do not know what is meant when they say that if they reduce Purchase Tax it will amount to a kind of undercover subsidy for the motor industry. I do not see the point. Purchase Tax, as it stands today at 50 per cent., is outrageous, even without taking into consideration the difficulties facing the industry because of the recession. It is probably the highest tax which any Chancellor of the Exchequer has put on any commodity. In any case, it is about 20 per cent. higher than the average Purchase Tax on the Continent.
There is not the slightest justification for such a penal tax on the motor industry. Prior to the recession I said that I believed that it was outrageous that people who wanted to run a car should have to pay 50 per cent. Purchase Tax. We talk about giving people opportunities to purchase cars, but then the Government come along and say, "All right, but we want 50 per cent. of the price in the form of a poll tax." It is monstrous, and the sooner Parliament has the courage to deal with this the better.
Further, I believe that the Government could do much more to give easier credit facilities to the motor industry so that it could more readily export its products.
I turn now to the workers in the industry. My trade union, the Transport and General Workers' Union, representing as it does a bigger proportion of workers than any other union, is, naturally, gravely concerned about the future of the industry and the welfare of its members. In fairness to the employers, I must say that my union has worked in close association with them, and relations have always been good. There has always been a real system of co-ordination, and discussions and arguments have always taken place in a friendly atmosphere. My union's relations with the employers has been an example to other sections of the industry. We therefore wholeheartedly join the employers in their request that the Government should give immediate relief to bring about some easement of this difficult position.
We have a tremendous regard for the motor industry. We appreciate the contribution that it has made—and which I hope it will continue to make—to the economy of the country. This recession which the industry is facing is far mare serious than the President of the Board of Trade was prepared to admit. It might well cause a great deal of unemployment in the supply industries. In recognition of the tremendous contribution which this industry has made to the economy of this country, the Government should feel duty-bound to give immediate assistance and thus show the industry, and the workers, that they appreciate what has been done and are saying "Thank you" in the most acceptable way.

7.49 p.m.

Mr. William Shepherd: The House always listens carefully to the hon. Member for Bradford, East (Mr. McLeavy), not only because of his interest in the industry, but because of the reasonable way in which he presents his case. I thought that I detected some lack of enthusiasm for the remedies which he suggested, and I think that it would be fair to say that, apart from the abolition of Purchase Tax—in itself a highly questionable project—there is very little the Government can do directly to assist. I am therefore not going to pursue what the hon. Gentleman said, but will try to deal with one or two aspects of this industry where I think


the position can be improved by the industry itself.
If I may presume to say so, I think in this respect the debate has been rather less satisfactory than the debate we had in 1957. Before I deal with the points that I am interested in, I wish to say a word about the Ford deal. I think that some of my right hon. and hon. Friends have materially underestimated the effect of this deal. I do not think for a moment that there is other than a tremendous difference between the Ford Motor Company having absolute ownership and having, shall we say, 70 per cent. ownership. There is a very material difference between these two circumstances. It is one thing to face a British annual general meeting and British shareholders; it is an entirely different proposition from being able to send orders direct to the board.
I am not at all happy about this change. If I knew less about the industry I might feel happier, but I am not unaware of what has happened at Luton. Those hon. Members who are aware of the inner circumstances of the motor industry will, I think, agree with me that had it not been for the fact that Vauxhall Motors were 100 per cent. controlled they would not have found themselves in the difficult circumstances in which they were some months ago. Because what happens when a company is 100 per cent. American-controlled is that American ideas are pushed very fast and very hard. I have no doubt that in urgent matters, such as styling and the failure to make a really small car, Vauxhall Motors were induced not by the circumstances or their executives but by the views of Detroit.
I must say to my right hon. and learned Friend the Chancellor and to my right hon. Friend the President of the Board of Trade that while I recognise the essential difficulties attaching to preventing a change of this kind, I am by no means convinced that this means simply a 25 per cent. ownership. It is critical, and when Mr. Ford tells us that this will encourage flexibility I am a little suspicious of what exactly flexibility means, because it can mean a great number of things. I join with the hon. Member for Bradford, East in praising the achievements of our industry. It has done a great job in the postwar years, not only in the time of

Sir Stafford Cripps, but subsequently. I do not think, however, that we want to praise ourselves too much, because our achievements, despite the fact that they have been considerable, have not in recent years equalled the achievements of our competitors.
I am sorry to say that the fact that there has been a certain amount of protection at too high a level and a certain amount of ease in Commonwealth and domestic markets, and the way in which the Americans received our cars, has tended to direct our attention from the important European market. While I laud what we have done, I still feel that we could have done better. It is towards this attempt to do better that we ought to be addressing ourselves today instead of worrying about small items like hire purchase. I do not think for a moment that even if we had a relaxation of hire Purchase it would materially affect an issue of this kind.
No one need be too depressed about what is happening. The industry has expanded at what was, perhaps, too great a rate having regard to the overall circumstances. Until a short time ago we have been selling more cars than last year, but, as the Minister said, an expansion of about one-third in the first six months of this year takes some absorbing; and if one runs into a little heavy weather, obviously the situation is not going to be so good. So we have to recognise that this situation, however depressing for the manufacturers and the workers, is just a little hiatus on the upward road. Our main concern, as any hon. Member can see by looking at the figures—I will not requote them, they have been quoted enough—is how can we increase our export trade. Clearly, no amount of home consumption will absorb the increase in production which is projected by the industry. It is to this question of increasing the export trade that I wish to turn.
First, we have to try to direct our thoughts to the market where we stand to gain the most and clearly that is in the European market. The easy sales of the past ten years have, I think, had a bad effect in that direction, as indeed has the high tariff. I wish that we could have had a reduction in the tariff on foreign cars coming to this country six


or seven years ago and then British manufacturers would have adjusted themselves to the competition that small European cars create for us in many markets of the world. This tremendous tariff and that degree of insulation has kept us from developing the kind of car which could be a very big seller in the European market.
It is true that we are doing something now, but it is rather belatedly. The Morris Minicar is a substantial achievement. Although it looks a bit odd to some people, it ought not to be underrated. It is a car with a tremendous future both in the home and foreign markets. It is true to say that the small car, in condition of high petrol cost due to taxation, has a tremendous market in Europe which represents 60 per cent. of the total market for small cars. We ought to be out for that market, producing a car smaller than the usual small car which would sell at a competitive price.
The second thing we have to do is pay much more attention to the styling, the quality and the finish of our cars. While I want to praise the industry, I also think that we ought not to be unmindful of its shortcomings. In design and styling we have greatly improved, but I am sorry that we have had to improve in many cases as a result of foreign intervention. I do not think that the Italianising of car styling is absolutely essential. We have people in this country who could do the job as well. We have improved our style but we are still defective in matters of finish and quality in certain respects. I should tremble, were I a manufacturer, to send some cars as they are now sent abroad.
In the past three years I have bought a number of motor cars, and I have never had a list of less than ten faults in those cars. They have not been substantial faults. I know that one can get a run of defective gearboxes or axles which are below standard. However undesirable and regrettable, it is one of those things which does happen. But cars go out from British factories in what I consider to be a most unsatisfactory state.
There are small defects like bad finish to the cars and chrome plating that disappears after three or four months.

There are windscreen wipers which do not work and what to me is an amazing fault—I do not understand how it is—there are leaks. I do not understand how a body pressed by a finely made tool giving virtually the same pressing within reasonable limits should almost invariably leak. I could understand it if the whole lot leaked, but when we get about 10 per cent. leaking it seems almost inexplicable.
These defects are damaging to our export trade. Manufacturers should use the time they now have available to achieve a higher standard of finish a rid to give attention to detail, because it is in our attention to detail that we are failing. One forgets engines these days because they no longer give any bother. One hardly ever thinks of an engine breaking down, and they certainly wear for a long time, but if we are to succeed in the export market we must give more attention to the important matters of detail and finish.
We need more research in this industry. My noble Friend Lord Hailsham had a lot of complaints when he said that it is appalling that the industry spends only £250,000 on research, but when I went to the Research Association a year or so ago I heard that it was spending only £130,000. I said something which I cannot repeat in this House. It was fairly emphatic. It is unsatisfactory that in an industry of this size the research effort should be as low as £250,000, of which the Government find a substantial amount. The industry ought to be conducting more basic research into the problems confronting it.
The industry ought also to improve its labour relations. I have spent a great deal of time going round motor factories trying to get at the truth about labour relations in the industry. It is an exceedingly complicated business. Broadly, those who have good relations are those who have worked very hard to get them and those who have not got good relations are those who regard labour relations as rather an adjunct to production which can be hived off to some personnel officer and left at that. I think we ought to say in this House, what I think is true beyond any question, that labour relations in industry, particularly in a large expanding industry such as the motor


industry, should be regarded as of such importance that the chairman or deputy chairman of a company ought to take a close personal interest in them. Obviously he has to employ personnel officers, but those personnel officers ought to report direct to a high functionary of the company so that, at the highest level in the administration of the business, this can become a reality.
I hope that those companies which have bad records will try to use the time now available to improve materially their labour relations, because it will pay very substantial dividends. Of course, it is true that shop stewards are often troublesome. It is also true that we cannot buy labour relations merely by paying higher wages. It is nevertheless the case that some manufacturers by dint of their energy and application have secured very fine labour relations in the motor industry, and if the industry were to make the effort I think that more could attain better relations in other firms. They cannot be attained merely by paying high wages or having a £5,000 a year personnel officer. It has to be done by the workers believing that management is sincere in its attitude towards them.
I very much regret that there is not that feeling in some of the motor oar firms. The result is that the men do not believe management wants to play the game. They have not the sense that the management has the highest level of integrity. Until that is achieved no amount of high wages and spending money will create good labour relations. Therefore, I hope that this industry will use the little more elbow room it may have in the next month or so to try to improve labour relations.
In this business in future we cannot look for the conditions which have existed in the past ten or twelve years. We shall face a situation in which in the summer time there will be peak periods of demand when everyone is working merrily and in the winter time demand will drop. We have been suffering from the effects of seasonal demand because of the great expansion in the demand for cars. Probably we shall do so again, but that will not be the natural order of things. I suggest that both employers and employees

might start looking at some method by which the position of the industry in the new conditions might be safeguarded. Men do a lot of overtime when the demand is high and they are stood off for three days a week when demand is poor. That is not a satisfactory state of affairs for the workers.
I was interested in what the Italians have done. They have pursued an idea which I think has a great deal of merit. Recognising that in essence this is a seasonal business they have made arrangements whereby the workers do not get paid for working overtime during the peak periods but get the maintenance of their standard wage when they are working less than the normal length of time. That system has a great deal of advantage if we can get the unions to accept it, because it avoids a high rate of overtime payment which necessarily inflates wages and makes it difficult to compete and also avoids the difficulty of men taking home wages for only three days' work a week. I do not know whether that would be practicable in this country, but it is an interesting idea which I think ought to be studied, because in future the demand will go up and dawn seasonally more than it has in the past.
I began by saying that I do not think there is anything really practicable which the Government can do to give substantial help to the industry. I believe there are many things which both employers and workers can do to help themselves. I hope they will use the time they have available in the new conditions to improve their circumstances because we in this country can produce motor cars at least as well as any other nation. We are an inventive and industrious race. We are even now learning how to make things look nice, which is an achievement we lost for a number of years. With all these qualities we can compete with any nation in the world in making motor cars.
I hope no one will try to create the impression that this business is finished. A lot of damage has already been done by a too gloomy outlook. It is not a gloomy, desperate position. It does not do to go about talking as if the industry were on its last legs. If it were, that would be a bad thing to do, and when it is not so it is even worse to do that


I believe the industry faces a more difficult future than the conditions it has faced in the past ten or twelve years. That future will not be so rosy, but we have a fund of ability in workers, designers and management. If we take to heart the lessons which are clear for us to see I believe the motor industry will enjoy a prosperous future.

8.10 p.m.

Mr. Victor Yates: We have listened to a very interesting speech by the hon. Member for Cheadle (Mr. Shepherd). I thought that, by and large, all the items which he suggested that the industry ought to consider made a first-class case for the examination of the industry by a working party.
I am not looking at this matter entirely from a political angle. If we take labour relations in industry as an example, some of us feel very strongly that the worker ought to be the greatest shareholder. I have had something to do with labour relations. I was once chairman and a member of a works council for a number of years. The council found that it was difficult always to get agreement. It is not only a question of the workers. The management has a responsibility to take the workers into its confidence and that, of course, is not always done, either in the motor car industry or other industries.
The hon. Member leaves the question of design, and what the manufacturers ought to do, entirely to the industry. He says that the Government can do nothing at all. When there was an earlier recession in the motor car industry, the manufacturers were inclined to dismiss the workers. That created very considerable hardship. I know numbers of workers with the Austin Motor Works who were purchasing their own houses and who found themselves suddenly dismissed. Having lived up to a certain standard, they were finding it extremely difficult to know what could be done. I know that numbers of them were taken back later. Now the motor car manufacturers are more inclined to share work, which also brings very serious problems.
What has impressed me about this debate today is the lack of any sense of urgency in this matter. I am amazed

at the attitude of hon. Members opposite, because the Government have very great responsibility. I know that in my own city of Birmingham a question which is affecting the workers there very considerably is that of short time. I thought that the Minister rather minimised its effect. In the week ended 5th November, in Birmingham, the numbers on short time were 44,000—a serious matter. A week later, on 12th November, the figure went up to 50,000. On 19th November it went up to 62,000 and on 26th November it rose to 72,000. What does that mean for Birmingham and its ancillary industries?
In my own constituency, the great firm of Lucas has decided to pension off their older workers in December next, earlier than they had intended. These men, who have given service to the industry, are now, in the evenings of their lives, to be suddenly put off. I could give a number of examples of Austin workers who are now faced with the fact that, suddenly, they are on three days' work a week. How do they meet their hire-purchase and other commitments? They are obliged to seek other work on two days. Many of them are serving behind counters in shops in Birmingham to supplement their incomes.
It is all very well for hon. Members opposite to say that wages in the motor industry have been high. The hon. Member for Birmingham, Sparkbrook (Mr. Seymour) told us how low wages were in other parts of the city. That is a reason for trying to increase wages rather than trying to depress them. If hon. Members believe that the solution to this problem is to reduce the cost of production by reducing wages, let them say so. We shall know then exactly where we stand. This problem is creating tremendous hardship. When will there be an end to it? Will it end by Christmas? Is it likely to be worse after Christmas, when, usually, unemployment and short time working is high? I cannot see the situation improving after Christmas, and that is what disturbs me.
The hon. Member for Cheadle said that the Government could do nothing except, perhaps, lower Purchase Tax or abolish it, and that that would make no material improvement at present. How does he know that? On what facts does he base that statement?

Mr. Shepherd: I think that the hon. Gentleman has misunderstood me. I said that I did not think that the elimination of hire-purchase restrictions would have much effect. I did not think that it was, in a broad sense, a wise thing to reduce Purchase Tax.

Mr. Yates: I gathered from the hon. Member's opening remarks that there was nothing that the Government could do except reduce Purchase Tax and that he was not enthusiastic about that.
The hon. Member went on to say that the industry was faced with foreign competition, but he did not associate that in any way with the fact that European countries have not the same burden. Germany is an example. We are worried about increasing the demand in the home market. Is Germany worried about that? Not at all. Germany has outstripped us.
Is Germany worried about the home market and increasing sales in the home market? Of couse it is not. The consumer tax there is nowhere near the 50 per cent. Purchase Tax which we have, If we adumbrate the reduction of Purchase Tax, we do it with very considerable enthusiasm from this side of the House. We have seen too many examples of the way in which this tax has affected the capacity of industries to compete.
When we discussed this matter earlier in the year during the Budget debates some of us made this case. Unless hon. Members opposite carefully examine the statements made by the motor car manufacturers they are blind to the facts of the situation. I am not especially partial to motor car manufacturers, but since I have been examining this problem I have been immensely impressed by the capacity of the British motor car industry and its efficiency.
The last speech made by the chairman of the Society of Motor Manufacturers and Traders, Mr. Geoffrey Rootes, at a dinner on 25th October, included the following comment:
As you know, we are making the strongest representations to the Government concerning credit restrictions and Purchase Tax.
He continued:
After all, we are not asking for any kind of subsidy or preferential treatment. All we are asking for is a reasonable degree of stability and freedom to develop our businesses

in line with the great potential demand for transport which exists in motor markets both at home and abroad. Nevertheless, we are fully aware that our ultimate success or failure will depend upon our efficiency and enterprise in the era of extremely fierce competition ahead. There will be some hard fighting, but I am confident that we can meet this challenge even if we do have to drag some heavy hardware in the form of taxation into battle with us.
That is a very brave and courageous attitude, but why should we ask them to drag heavy hardware of taxation into the battle?
In its Bulletin of March, 1960, the Society of Motor Car Manufacturers and Traders gave much information which was very interesting. It said that the achievements of the United Kingdom motor industry tend to hide the fact that, despite maximum effort, it has been losing ground steadily against Continental competitors. It gives the figures. In the United Kingdom, in 1954, the production of cars was 769,000, and in Germany it was 561,000. In 1959, the United Kingdom figure had risen to 1,160,000, but in Germany there had been a 210 per cent. rise to 1,440,000. If we look at the export figures we see that exports from the United Kingdom increased between 1954 and 1959 from 374,000 to 550,000, or 47 per cent., whereas the increase in German exports was from 247,000 to 720,000.

Mr. J. Silverman: A nationalised industry.

Mr. Yates: That may be an argument, but I am not seeking to make a political point at the moment.
Neither the hon. Member for Cheadle nor anyone else can show that our motor manufacturers are failing. What is the reason for this decline? The manufacturers say that the prime factor in the United Kingdom's loss of competitiveness in recent years has been costs. Costs are not wholly wages. They say that we may be slightly at a disadvantage in that respect, but add:
The industry has consistently pressed the importance of a sure, high level of demand at home as a basis on which it may confidently install the best equipment for large-scale manufacture with the consequent opportunities for cost reduction.
I am bound to say that I think the Government are completely ignoring the representations made to them by the motor car manufacturers.
If Germany can do it, why cannot we? Germany was supposed to have lost the war, and she is being asked to pay more towards the cost of defence. Having escaped with fewer demands upon them, and there being fewer demands on their own market, the Germans have been able to go ahead with their industry.
Many workers are asking, "If we have to face increasing short time, what will happen when the industry has been expanded?" A sum of £250 million is to be spent on expansion. The workers ask what this will mean to them in Birmingham, Coventry and the Midlands generally. The question is not easy to answer.
So concerned are they about it that I received a letter a few days ago from one of the area organisers of the National Union of Vehicle Builders, Mr. George Evans. In it he informs me:
The position that has now been reached is that the Mulliner Management have informed both the Midland Sheet Metal Workers' Society and our own union (the N.U.V.B.) officially that unless there is a very considerable reduction in earnings, and a substantial reduction in the rates and conditions, then inevitably the place will close down.
He goes on to ask why the recession should be used as a means of lowering wages, and continues, referring to proposals made by Mulliners:
These proposals are put forward on the grounds that the Company has to compete with people who it is alleged can do the job more cheaply. In this connection it should be borne in mind that the Standard Triumph International Company have acquired Hall's Engineering, of Liverpool, as a body-building shop, where the rates and conditions approximate to those which Mulliners desire to introduce here.
He says that two points have to be borne in mind. First,
that companies are taking advantage of the recession to reduce earnings.
Secondly, that they are using in evidence against the workers
these new factories which are being brought into operation as a result of the expansion programme.
That is not the way to reduce costs. The Government can assist manufacturers to reduce costs, one of which is the 50 per cent. Purchase Tax which is a burden on the home market. I do not think that there would be an immediate improvement; as the Minister said this

afternoon, it would take some time. But if the advice had been taken a year ago we should probably be facing a different situation now.
On behalf of the motor car workers in Birmingham and those working in industries associated with the motor car industry, I ask that something should be done for the industry. It is a matter of urgency. It is no use the Government saying that they can do nothing about it, for it is a responsibility which they must accept. They should agree to an examination of the industry. If they believe that they are right in their policy, then they can have no objection to an examination of the motor industry by a committee which can go into every aspect of it and establish what are the difficulties about increasing our export trade. It is certainly a matter of urgency, and the Government will have to answer very seriously in the near future for their lack of judgment and their lack of a policy for dealing with this difficult situation.

8.28 p.m.

Mr. John Page: In rising to speak to the Amendment I must disclose an interest, because I work for a company that supplies components for the motor car industry, amongst others.
It is only because I have practical experience of the industry that I am so brave as to challenge the hon. Member for Birmingham, Ladywood (Mr. V. Yates) and, even more so, the hon. Member for Newton (Mr. Lee) who opened the debate. They, in common with all the other speakers from the benches opposite—I have listened to every speaker today—failed to recognise the most important feature of the motor industry, one of the motor industry's facts of life, which one has to consider.
The industry always has been, and always will be, a fluctuating industry. The hon. Member for Newton said in answer to an interruption that the Government are turning the car industry into a seasonal industry. It is nothing to do with the Government. It is the industry itself. As they have not been mentioned so far, I will now state what I think are the chief reasons why the industry must, probably for the rest of its life, be a seasonal one.
It must be a seasonal industry, first, because it is so dependent on export


markets. My hon. Friend the Member for Cheadle (Mr. Shepherd) made some extraordinarily sound suggestions for improving export business, which the industry should note. The second reason why the industry is seasonal is that people prefer to buy cars when the sun is shining. They do not want their new, glistening idol to arrive at their home covered with mud, rain and dust? They want to buy it in the spring or summer. The third reason is that if a car is bought in October, November or December it is a 1960 car, but if it is bought after 1st January next year it is a 1961 car. Unreasonable though that may seem, that will probably make a difference to its trade-in value.

Mr. A. E. Hunter: The sun in shining in New Zealand and Australia. There is a market in those countries.

Mr. Page: Exactly. That is why export markets are so important. The motor manufacturers are very eager to find a place where the sun is shining at Christmas. However, we have no control over those export markets, nor over the demand that comes from them.
The industry is becoming more and more a fashion industry and, rightly or wrongly, people buy their cars because of the fashion trends that may occur in the industry. It must be accepted that it is a fluctuating industry. We must try to avoid the worst effects of the fluctuations. There must be many more industries which are more seasonal than the motor industry. The fireworks industry seems to have most of its manufactures used on one day of the year, when the population rather unkindly celebrates a not too successful occasion.

Mr. J. Silverman: There is no seasonal unemployment in the fireworks industry.

Mr. Page: No. I am not an expert on pyrotechnics, but the industry has diversification. It also makes Very lights and signal lights for aircraft, etc. It is impossible for the motor industry to diversify to any extent, so what has to be decided is how the fluctuations can be mitigated.
It has been mentioned in the Press—but not in the House—that the orders of any manufacturer should be spread over a longer period and that he should not

work overtime in one month in order to meet his orders in that month, but should try to spread the orders over two months. Unfortunately, it must be recognised that in this competitive market, unless a manufacturer can provide his customers with better delivery than his competitors, he loses the order. If manufacturers had reduced their overtime in the summer months to spread their orders they would not be working longer hours than they are today. Their business would have gone to overseas manufacturers or other manufacturers.
How can these fluctuations in this attractive and highly-paid industry best be tackled so that they do not hurt the people who work in it? I think it was my hon. Friend the Member for Cheadle who spoke of what is being done in an Italian factory, and such a plan was suggested in our industry after the 1957 recession. It was suggested that in one or two British factories the managements and the unions should agree that in times of peak demand—particularly in the spring—the team of workers in that firm should work as much overtime as was asked for, that in normal times they should work just the five-day week, and that in the slow times the work should be spread over the employees so as to make a three-day or four-day week.
If, as has been said about this Italian factory, during times of peak demand when overtime is being worked there could be a voluntary saving into the firm's bank, in some way—it could obviously be arranged—and then, in the slow times, the savings could be withdrawn to make up the four-day week pay to something like the pay of a normal week. The workers could then expect to have a standard normal wage throughout the year.
I do not know whether it is unfortunate or not that in the scheme that has been mentioned the peak times have gone on for almost twelve months in the year for the last three years. If the good times come consistently, it makes it more difficult for people then to realise that they should be making provision for the bad times that may be ahead.
The hon. Member for Coventry, North (Mr. Edelman) said that the industry is bleeding to death. My constituents are post office workers, bus drivers, bus conductors and people like that and, quite


frankly, they think that that is an exaggeration. When workers in the motor industry can work a four-day or three-day week and still consistently earn more than my constituents they feel that it is bad luck but that they should not really need to feel the pinch of hardship as quickly as they have.
I think that it was in October that my right hon. Friend the Minister of Labour said that he had been in touch with the Confederation of Engineering and Shipbuilding Unions and with the Engineering and Allied Employers' National Federation to see whether they could get together at a high level to discuss the best way of fostering good relations and good working conditions in this industry. I hope that that meeting will take place and that when it does the employers' representatives will try to remember the words of Sir Charles Bartlett, who was chairman of Vauxhall Motors. In 1946, and on many occasions afterwards, he said that the prime idea behind Vauxhall Motors was to give regular employment to 10,000 people in Luton. I do not believe that the management side of the industry fries nearly hard enough to put over the ideas behind the company to the people who work for them. If they spent one-fifth of the time and one-fiftieth of the money which they now spend on selling their vehicles to their customers in trying to better relations between management and workpeople, conditions in the industry would be greatly improved.
I believe that if the trade unions could give to management just one assurance, management would concede every reasonable request from the unions about pay, working conditions, hours of work and so forth. I believe that any reasonable request would be granted if the unions could give that one assurance, that is to say, that agreements made between union and management officially would be honoured. There are many hon. Members in the House who know far more about this than I do, but I imagine that there is not at present a single union leader who could give an assurance to any management that the agreements entered into would be strictly honoured by all those on the shop floor.

Mr. Percy Wells: The hon. Member will agree that union

leaders give an undertaking that they will use their best efforts to see that agreements reached are observed.

Mr. Page: I accept that, but best efforts are not the guarantee which is really needed. In the Report of the General Council of the Trades Union Congress for 1960 there is a reference to the unofficial strikes which are, I believe, the most damaging feature in all relations between management and employees in the industry. I do not know whether this applies to the motor industry, but I should think that it does. It is said in the Report:
In about half the cases reported to the General Council where strikes began without official sanction, the unions paid dispute benefit.
That means that the other half remained unofficial. There is then a reference to harmful arrangements made by joint shop stewards committees. The Report says:
Some joint arrangements between stewards have been harmful. Where decisions about a programme of demands and priorities have been constitutionally taken in a union, it is wrong for stewards to set them aside.
Again, it is said:
No more than any other union representatives are stewards entitled to act contrary to union rules or agreements.
My final quotation is this:
Unions should be more vigilant and if, after a warning, a steward repeats actions which are contrary to rules or agreements his credentials (which are his opportunities to do good or, in a few cases, harm) should be withdrawn.
The trouble with the motor industry is that it is a highly automatic industry and that the withdrawal of labour by just a few employees can put thousands out of work. There was a case recently where, I think, six drivers at the Austin Longbridge factory had an unofficial dispute and the whole factory had to be closed.
These are the conditions which are bedevilling good relationships between management and employees. The solution lies fairly and squarely in the hands of the trade unions themselves and the trade union leaders. No Government action and no action by the House collectively can bring about an improvement in discipline among the unions and their members in the factories. If the House can do nothing collectively, all


that we can do as individual Members of Parliament is to try to put across the idea that agreements made between unions and management must be accepted. If hon. Members opposite will impress this on the trade union workers who voted Labour at the last election, we on this side will impress it on the millions who voted Conservative.

8.45 p.m.

Mr. Julius Silverman: I think that every hon. Member condemns the irresponsible unofficial stoppage, especially when it puts other workers out of their jobs. It goes without saying that the other workers condemn them too. But do not let us exaggerate this phenomenon in British industrial life. Our labour relations are better than those of most other countries. The time lost by strikes in this country is less than that lost in most European countries and in America. I sometimes think that the newspapers especially play up unofficial stoppages to too great an extent.
We should also bear in mind that the trade unions are voluntary organisations. They cannot regiment their members. Many unofficial stoppages occur in factories where labour relations are bad. I agree that, if some firms spent a small percentage of what they spend in other respects on improving labour relations many unofficial strikes would disappear. In that respect I agree entirely with what the hon. Member for Cheadle (Mr. Shepherd) said, and, indeed, with what the Minister of Labour said at the Conservative Party conference.
The function of labour relationships is primarily the function of management. While there may occasionally be some troublesome workers, more often than not these troubles are to be found in factories which have always been bedevilled by bad labour relationships. As I have said, the main function is that of the management. For heaven's sake, do not let us overplay this complaint, however undesirable it may be.
I listened with some alarm to the speech of the President of the Board of Trade. He said that the trouble besetting the motor car industry is a mere fluctuation. First, the curve was going up steeply. Now it is flattening out. But this fluctuation, this curve in the chart, is affecting the lives of men,

women and children in Birmingham and elsewhere. It is causing very real hardship. It is easy to say that the men in this industry have been earning very good money. Many but not all of them have been earning these good wages. Those who have a reduction of an average of 25 per cent., and in some cases very much more when they are working a three-day week, are suffering very serious hardship.
The hon. Member for Birmingham, Sparkbrook (Mr. Seymour) said that these people have been enjoying an inflated standard of living. In some cases it is a question not of an inflated standard of living but an inflated cost of living. For instance, rents have gone up in many cases. When there is prosperity in a city like Birmingham, it attracts people into the city, and this results in pressure on accommodation and rents increase. What may be called creeping decontrol is affecting thousands of houses in Birmingham. The rents of many houses in my constituency, which only three years ago were rented at 15s. or 16s. a week, have been decontrolled. Those houses are now being let at £4 a week. If a man is earning only £12 or £13 a week, or less, whether he is the tenant or the owner-occupier with a mortgage payment, £4 or £5 a week is a fairly large chunk of his wage. This is causing considerable hardship.
Then, there are the commitments which many of these people have entered into in hire purchase. I do not particularly like the hire-purchase arrangements. Many people in Birmingham call them the "glad and sorry" system—they are glad when they buy them and sorry when they have to pay for them. At the same time, a good deal of this "never had it so good" prosperity is based upon hire-purchase payments, not only on the products of the motor industry, but on the products of other industries.
The motor car worker finds that he cannot meet his payments and he has to pull things very tight to meet them, or in some cases he has to give them up. There is no doubt that in many cases the hardship is genuine. It is not good enough for the President of the Board of Trade to sit in the presidential armchair and say, "This is just an economic recession. I can sit in my armchair and


observe the working out of this economic destiny and not bother about the lives and fortunes of these people."
What have the Government done about it? What are they doing? I expected to come here today and hear the Minister make an announcement about hire-purchase restrictions. That might be only an ambulance or temporary measure. I do not say that it would solve all the problems in the industry, but it would do something to alleviate the position of those whom I and many of my colleagues represent. But we have heard nothing whatever.
Why are these hire-purchase restrictions retained? I know that the country is generally in economic difficulties. If it was a question of forcing manufacturers to sell abroad the cars which these hire-purchase restrictions prevent them from selling here, there might be some sense in it. At present, however, they cannot sell them abroad. The export market is restricted. Therefore, what on earth is the sense of not selling them at home?
I waited to see what reason the President of the Board of Trade would give. He said that we must stop imports from coming in. What percentage of a motor car is imported? There may be a little imported steel and there is the rubber, which is generally imported from Commonwealth sources, which use their earnings from us to buy goods here. So it is as broad as it is long. The whole of the imported element in a motor car amounts only to a few pounds. Are people to be prevented from producing these cars because of this small imported element? The Minister did not give us the reason behind all this and we cannot see the sense in it.
When Labour was in office we had to restrict home purchases for the very purpose of developing trade abroad, but what is the sense in it now when we cannot sell motor cars abroad? Even from the long-term aspect, if the Government intend to develop and expand the home market for motor cars, the only way in which it can be done is by extending credits. We have reached the stage when only people below a certain income level—generally, the working class—represent the expansion possible in the market, the people who can buy the

cars, but only if they have extended credit. They cannot buy on the basis of the existing deposit and two years' payments.
The Government must make up their minds whether they want to expand the home market. We do not know what they want to do. We want to know and we are entitled to ask. If the Government intend to rely solely upon the export market, and I agree that the main market for the future of the industry must depend upon exports, where does that future lie? What sort of motor car industry do the Government envisage? We do not know and the Government do not know.
We have been told today by the President of the Board of Trade that the rate of increase has slowed down and we can now expect a rate of increase roughly-speaking equivalent to the development of industry as a whole, which was 3 per cent. or 4 per cent. over the past few years. I know that at the moment there is none. We have heard that the motor car manufacturers have embarked on a £250 million expansion which will expand the industry by 1965 to twice its present level. There is the disparity. We hear of expansion in terms of 2 million, 2½ million and 3 million motor cars.
Somehow or other the Government and the motor car manufacturers must get their heads together and decide what is to happen to the industry. If we are to have in 1965 an industry with a capacity of about 100 per cent. more than at present and a market of only about 20 per cent. more, the consequences will be a very great deal more unemployment than there is now. We are entitled to ask the Government what they envisage. For this purpose we believe that there ought to be some high-powered organisation—and I am not talking about the present Advisory Council—which can go into the future of the industry. What is the rate of expansion that the industry can tolerate? What amount of the industry should be devoted to the private car and what amount to the commercial vehicle? Does the main field of exports lie with the commercial vehicle? If it does, obviously there ought to be a radical reorganisation of the industry, and the time for that is now.
Where are the markets to be? It is clear that the American market is bound


to contract. There may be the possibility of some expansion in Europe. I am not talking now about the next two or three years, for we cannot solve the industry's problems in that time, but it appears to some of us that the future must lie in vast undeveloped or underdeveloped territories like Africa, India, and China. We may not be able to sell motor vehicles in any great quantity there today, but the time to think about this is now. We must think in terms of credit today. It may be difficult for a country like ours with balance of payments problems, to think of credits today, but if we are to think of the future those credits are essential. We are up against powerful competitors who are giving the credit today and getting into that market. If they are getting into it today, they will continue to get into them tomorrow.
These are the sort of things that should be investigated by a working party or some similar body which the Government should institute. It should go broadly into the future of the industry to see where the industry is going, where it can get to and what are its prospects at home and abroad. It should consider the degree of reorganisation that is necessary to make the industry successful against our competitors abroad. That is why I hope this matter should be pressed to a division unless we receive a satisfactory answer at the end of the debate.

9.0 p.m.

Mr. Douglas Jay: First, may I say how glad I am to congratulate my hon. Friend the Member for Blyth (Mr. Milne) and the hon. Member for Birmingham, Sparkbrook (Mr. Seymour), who made excellent, well-informed speeches. I only regret that they had to make their maiden speeches in such an extremely gloomy debate, one of the gloomiest that I have ever heard in the House. I hope that we shall hear them again on a rather gayer occasion.
I am rather astonished that the Chancellor of the Exchequer has not put in an appearance throughout the whole of the debate. He is, after all, responsible for the Purchase Tax, and it was the Chancellor's predecessor who announced the hire-purchase restrictions last summer. It is rather extraordinary that

the present Chancellor, even if he no longer has any co-ordinating authority over Government economic policy, should be completely indifferent to the fate of 100,000 workers now on short time in various parts of the country.
I admit that I have a good deal of sympathy with the present Chancellor. He does not get a very good deal from his colleagues. They made him Foreign Secretary in 1956 and now they make him Chancellor of the Exchequer in 1960. I daresay that there is about as much trouble ahead of him now as there was then. Nevertheless, I think that the Chancellor's predecessor, Lord Amory, has shown a very intelligent sense of timing in drifting away at this period from the job in which he was previously occupied. I suppose that he is now sitting placidly contemplating the flooded Devon countryside and grumbling happily at the follies of the Government and the perversities of nature.
After all, this "phoney" electioneering boom of 1959, after barely twelve months, has now—just as happened in 1955—turned out to be completely unsound, and this time it was largely a hire-purchase motor car boom, and its collapse this year has left the country's economy completely unbalanced. This time the Government have made the aftermath even worse to the economy as a whole by having swept away practically all controls on imports last year and managed incidentally to make the £ convertible into the bargain at the same time.
The whole of this story is another proof that if we are not prepared to have any planning at all, we cannot have expansion in this country without getting into a balance of payments crisis. And so what do we find? We find that the Government fall back on the only two ideas they have—hire-purchase restrictions and a high Bank Rate. What this does in the motor car industry and in other industries is to hold down production and employment without assisting the balance of payments or exports in any way at all.
There has been no recovery in motor car exports since we had these restrictions put on this summer, and so I am not surprised to find the National Institute of Economic Research, which is a very respectable authority, now predicting—and this is gloomy again—that we


are heading for a balance of payments deficit of at least £100 million a few months ahead. What is so astonishing is that we have got into this jam this time when not merely is there no dollar shortage in the world, but the situation is exactly the reverse.
How the late Sir Stafford Cripps or the present Home Secretary would have welcomed a situation in which there was no dollar problem for this country! I think that it is a marvellous achievement of Her Majesty's present Ministers to have created a large balance of payments deficit, with a 5 per cent. Bank Rate, with the most favourable terms of trade since the war and with no dollar shortage in the world. I am not at all surprised that in this situation the previous Chancellor has discreetly vanished away to another place.
It may be that it is the balance of payments situation which explains why the Government were in such an extraordinary hurry to snatch some foreign exchange out of the Ford transaction. The hurry was so great, we now discover, that the Chancellor gave his permission for this deal without even waiting to find out whether the American Government were in favour of it. We accused the Government a fortnight ago of acting hastily, and we now find that they had not even troubled to ascertain the American Government's view before they reached this decision. The Chancellor told us at Question Time today that he now had an assurance from the American Government that they would not stand in the way of the Ford deal, but will the Minister of State say whether Her Majesty's Government knew that before they gave their permission?
It is a curious story, because the United States Secretary of the Treasury saw the Chancellor in London on 25th November after permission had been given and then went home to the United States and tried to stop Mr. Henry Ford going forward with this transaction. It is a curious sequence of events that Mr. Henry Ford came to London in October and saw the President of the Board of Trade, but they did not discuss the issue at all, and then Mr. Anderson, the American Secretary

of the Treasury, came here himself and saw the Chancellor and then both followed exactly opposite policies.
I do not know whether the Prime Minister would call that interdependence or Atlantic union, but the House is entitled to answers to two questions. First, is it certain that our gold and dollar reserves will benefit to the full extent from the Ford deal? The Chancellor gave an answer on this subject at Question Time today, but it was too brief and too involved for me to feel sure that that would be the case. I hope that the Minister of State, with the help of the President of the Board of Trade, who is now muttering to him, will be able to assure us tonight that if the deal goes through at least we will get that addition to our reserves.
Secondly, has there been any assurance from the American Government that, supposing the British Ford Company becomes wholly owned by the American company, American law will not be used to interfere with the British Ford Company selling motor vehicles to China, or any other country on the other side of the Iron Curtain?
I understand, and I think that it has not been denied, that it is possible under American law for the American Government to put pressure on a parent company in the United States to prevent it selling the products of a subsidiary in this country to countries to which the United States does not wish to export. We ought to have a precise answer to that question. Is that the case, and did the Government get an assurance about that issue before they gave permission for the deal to go through?
The main victims of all these shifts, changes and confusions of Government policy are the motor industry and other engineering industries which have thousands of people on short time. Because all other methods of steering the economy have been thrown away, those industries now have to be violently jolted about whenever the Government get into difficulties. First, when an election is coming they are encouraged to expand without limit and to take on new workers and to sell goods on hire purchase for only a nominal deposit; new factories are developed in new areas, and so on; the banks are launched into the hire-purchase business and all sorts of finance


companies borrow from the public at 7 per cent. or 8 per cent. to encourage hire-purchase transactions almost without limit. The election posters, at this stage in the cycle, tell us that the secret of perpetual prosperity has been discovered by the Tory Party.
Then we get to the next stage, when the election is over and when demand is cut down—the Bank Rate goes up; hire-purchase restrictions are clamped on again, and, within a few months, overtime stops, production falls and new cars, T.V. sets, refrigerators, and all the other symbols of the windfall State pile up in the warehouses, and, as I am told at the moment, overflow into the rain outside in various parts of the Midlands. The finance companies find that their customers cannot repay their debts and we get financial troubles as well.
What a way to run the economy! It is grossly unfair to the motor industry and other industries which are singled out as guinea pigs for these political experiments. I do not blame the motor industry for the present fiasco. I blame the Government, for their only policy—and I do not know whether the Chancellor takes responsibility for this, because he will not even come to the House—is to create such a depression in the home market that they hope that the car firms will be forced to export. That, in effect, is what the President of the Board of Trade was saying. The Chancellor himself said, in a speech at Liverpool to some accountants the other day, that the only alternative to this policy was physical controls. He is quite right. So, of course, it is.
I believe that the motor industry, if it were given a chance of steady employment and planned growth could contribute very handsomely to an expansionist policy. After all, the industry and its workers have some considerable achievements to their credit since the war, both in production and in exports.
As many cars were produced in the second quarter of this year as in a whole year ten years before—that was before the guillotine came down, of course. Even exports in 1959 were double those in 1953, and in the earlier months of this year they were even higher than they were in 1959. The present slump has been sudden and sharp because the

Government forced these restrictions on the home market just at the moment when exports were falling. That has been the source of the trouble.
I am not quite so pessimistic as my hon. Friend the Member for Hammersmith, North (Mr. Tomney), though he made a realistic and interesting speech. If we look rather further ahead, we find that the whole world wants motor vehicles—and not merely cars but lorries, tractors and all the other things which the industry produces.
I think it is true that the United States has about reached the saturation point with, I believe, one and a half cars per family—after which one cannot expect production to rise at the previous rate. This country has not come near to that level, and there are a great many countries in every continent which have not yet reached the point where the demand begins to rise.
I believe that it is true that there are more cars in Los Angeles than there are in Asia. If that is so, it is a solemn thought for the future of our industry. Surely over the next thirty years we shall see roads built all over Asia, Africa and South America, where there are no roads at the present time.

Mr. Lee: We could do with more.

Mr. Jay: My hon. Friend says that we could do with more roads here as well.
The motoring firms are probably right to plan on the assumption that this country must hold its share in the motor trade of the world. Certainly, the export market in future will be less in North America and more in Europe and other continents. Unhappily, in the next five years it will be largely in Western Europe, and the Government have not been notably successful in their European trade policy, in opening up avenues for increasing exports in the main markets in Western Europe.
For that reason, if for no other, the Government are under an obligation to take far more action than they have done to assist the motor industry to increase exports. Have we done, for instance, as much as we could do with export credits, not merely for cars but for commercial vehicles as well? I know that we have lately had a further concession and new facilities from the Export Credits Guarantee Department.


The remarkable fact is that in every debate in which we discuss export credits the Government always question whether what is proposed from one side of the House or the other is practicable; yet twelve or eighteen months later they make a further concession, just as had been suggested.
Have we done everything possible on a sufficient scale in market research abroad for British motor vehicle exports? I know that the Board of Trade's information services have been greatly improved, but may there not be a case now for a major effort by the motor industry and the Government to find out what the future markets abroad will be? After all, enormous sums of money are at stake, and large sums of public money are at stake, in the present motor expansion scheme, and I would have thought that the Government had some responsibility for seeing that we got the best possible information about the future of markets.
Why, for instance, is it that British cars have been losing their share of export markets in the last few years? Do we really know? Is it design? Is it petrol consumption? Is it price? Is it because of services and spares, or any of these issues which have been so much discussed? Is it true, for instance, that German exporters get considerable tax concessions which British exporters do not? If it is true, why should not British exporters have the same concession? Could we be told?
I was struck by what my hon. Friend the Member for Hammersmith, North said about commercial vehicles as opposed to cars. Do we know what the balance will be, say five or ten years hence, or have we even got the best information as between cars, on the one hand, and lorries, on the other? Is it not possible, for instance, that China and the Soviet Union may have an enormous demand for motor vehicles if we look ten to fiften years ahead? These questions are at least worth pursuing as vigorously as possible.
If the Government have not the energy or the imagination to help exports in any of these ways, it is their duty to relax some of the restrictions on the home market. One policy, which it seems to me is indefensible, is to sit back and do

nothing and watch the industry sinking into recession and see people losing their jobs.
That very staid commentator on the economic scene, the National Institute of Economic Research, declared only last week that there was a strong case for easing hire-purchase restrictions at the moment. The Institute pointed out that the effect of this would be temporary, and that a temporary stimulus is exactly what is needed at the present time. It seems to me at least the period of payment might now be lengthened, and that the Government might take this positive step here and now, before Christmas.
The President of the Board of Trade said today that he would not hear of any relaxation of Purchase Tax. If the industry was fully employed, as it was up to 1952, and export demand was brisk, I think that that would be perfectly justifiable. But here again, as with the hire-purchase restrictions, the Government seem to be following the wrong policy at the wrong time. The Chancellor of the Exchequer is clamping down on demand in all these ways when motor car capacity is grievously underemployed, and admittedly underemployed.
I remember that in 1951, on account of very heavy defence demands, the Labour Government raised the Purchase Tax on motor cars from 33⅓ per cent. to 66⅔ per cent. instead of the 50 per cent. today, despite all this unused capacity. As a matter of fact, in defending that increase during the Second Reading debate on the Finance Bill in 1951 I said that it would not be our intention to maintain this tax at the higher level
at any time when the demands of defence, exports, and the home market together might fall seriously below the capacity of the Industry."—[OFFICIAL REPORT, 8th May, 1951; Vol. 487, c. 1772.]
Can the Government really question today that total demands from all those sources have fallen below the capacity of the motor industry at present? I do not think the President of the Board of Trade can brush aside this whole question of Purchase Tax as summarily as he did this afternoon.
The National Institute also makes this very pointed comment on the present situation in these industries. It says:
The Government should reassure industry"—


I rather like these words—
that official policy is still to promote long-term growth. Temporary checks are much less alarming if they are generally understood to be no more than temporary.
But is this check temporary? The stagnation we had after the 1955 election lasted for about four years, right up to 1959. So I should like to ask the Government: how long is this new post-1959 stagnation in our industry going to go on? We call it stagnation, but it means redundancy and loss of overtime and jobs to ordinary people.
How are the Government expecting that this situation will come to an end? What will end it? Will it be by some action of the Government, or are they waiting for a piece of luck from the outside world—perhaps waiting for Mr. Kennedy, or Dr. Adenauer, or Sir Roy Welensky, I do not know—anybody to take some convenient action to get them out of their difficulties. I wish that the Minister of State would tell us how he sees this present situation ending, if he believes it to be temporary.
Any one who looks around at the industrial scene in this country today can see how utterly fraudulent was the Tory election propaganda eighteen months ago. We were told that life was better under the Conservatives; all those posters said, "Life is better under the Conservatives." What was it that made life better under the Conservatives? It was very largely a hire-purchase boom to enable people to buy motor cars which they could not afford. Now, of course, those very loans on which this boom was founded, and which bought votes for the Tory Party, are turning out to be bad debts. Who is it, after all, who has ruined this better life and this boom? It is not the Labour Party, as the posters foretold. It is the Chancellor of the Exchequer, who has ruined it with all the restrictions which are now in force.
There was one poster, in particular, which depicted a happy family expressing their enjoyment of this better life by standing round and polishing a newly acquired car. I very much wonder what has become of that family today.—[HON. MEMBERS: "They have two cars."] My guess is that the owner of the car has lost his overtime, if not his job; that the hire-purchse debt is not being repaid

and that the car is now standing in a sodden Warwickshire field.
I hope, therefore, that in this situation the House will show that it recognises that a great deal of the plight of these industries, based on hire purchase which was stimulated in this way and then let down, has been due not just to the usual incompetence of the Government, but to the political manoeuvres which we always associate with the party opposite.

9.25 p.m.

The Minister of State, Board of Trade (Mr. F. J. Erroll): I should like to add my congratulations to those which have already been offered to the two maiden speakers in this debate, the hon. Member for Blyth (Mr. Milne), who has surprised and delighted us with his very early appearance as a speaker in this Chamber, and, by way of contrast, my hon. Friend the Member for Birmingham, Sparkbrook (Mr. Seymour), who has taken considerably longer to make his first speech. We are very glad that we shall now be able to hear him more frequently than in his brief interventions at Question Time in the past.
The right hon. Member for Battersea, North (Mr. Jay) chose to end on a rather political note and to add a certain liveliness to a debate which at times had perhaps been cast in a rather lower key. I should like to remind him of some dates. He said that the election took place eighteen months ago, but he was actually implying that the election took place only this last October. The great upsurge in production in the motor vehicle industry occurred after the election, not before it. I think it will help the House if I give one or two of the facts about the increase in production to show that it was not the artificial stimulus, which he maintains took place before the election, which led to our election victory. It was the confidence which the country had in the effects of a further period of Conservative rule which led to the right and proper desire to acquire a motor car as soon as possible.
Production of cars was at a weekly rate of 22,800 in 1959, but the very substantial increase in production took place during the first half of this year, well after the election was over and won. The average weekly production rose to 30,200 in the first quarter and to a record of 31,200 in the second quarter. In the


first ten months of this year output has exceeded that of the whole of 1959, with exports of half a million vehicles. Nor has this just been a hire-purchase boom as the right hon. Gentleman and certain others have suggested, because, in fact, only about one new car in five is bought on hire purchase. When I deal with hire purchase in more detail later I shall be able to show that although hire purchase sales have declined a little it is by nothing like enough to justify the strictures made of the present hire-purchase restrictions.

Mr. Jay: Is the right hon. Gentleman now denying that there has been a motor car recession at all in recent months?

Mr. Erroll: No. I think that if the right hon. Member will listen to the way in which I deploy my case he will benefit a great deal between now and 10 o'clock. I should like to make a little further progress. The decline occurred in the third quarter of 1960, but even so the average production has been almost 24,000 vehicles a week, which was higher than the weekly average in 1959 taken as a whole and above the average for the corresponding quarter of 1959. So, if it is recession that hon. Members call it, it is certainly a very mild recession because production is still running at a higher rate than last year.
Coming to the month of October, the production of cars was at the rate of 8,600 a week fewer than the peak weakly average of over 31,200 reached in the second quarter of this year. This fall of 8,600 is made up of a fall of about 7,000 in exports and about 1,600 in the home market. My right hon. Friend in leading for our side this afternoon said that he would leave to me the full reference to exports which this debate certainly deserves. As it is in exports that we have been doing less well, I thought the House might like me to refer particularly to some of the export problems which affect the motor industry at the present time. I shall, of course, refer to the other matters which have been raised, but I thought I might devote a few minutes now to the export situation.
I am sorry that I must burden the House with one or two more figures in order to put the matter into proper perspective. Car exports from Britain

have shown a steady rise over the years and reached a total of almost 570,000 in 1959. In the first quarter of this year there was a very spectacular rise in exports which, for purposes of easy comparison, I would quote as a rise to an annual rate of 740,000 a year. Even in the second quarter of this year we were doing well because exports were at an annual rate of 720,000 a year. However, in the third quarter, exports fell to an annual rate of about 460,000, and for the month of October, the last month for which we have figures, exporting was at an annual rate of about 300,000, a very serious fall in the last couple of months. But altogether the export sales of cars for the first ten months of this year amount already to over 500,000.
The main cause of this decline is the decrease in deliveries to North America and, in particular, to the United States. We were doing very well in the United States at the beginning of this year. We exported 55,200 in the first quarter and 47,700 in the second quarter, but in the third quarter, our exports fell to 21,800 cars.

Mr. E. Fernyhough: Can the Minister give us the value as well, because at the moment we are exporting many more small cars? They are getting smaller and smaller and the export value less and less.

Mr. Erroll: I shall be giving figures of value which, I hope, will satisfy the hon. Gentleman. In Canada, exports of 30,300 and 29,600 in the first two quarters fell to an export of only 14,800 in the third quarter.
These are the figures for which the hon. Gentleman asked. In 1959, British car exports to the United States reached a value of £87 million and this accounted for about 40 per cent. of all the United Kingdom exports of motor cars.
It would be easy for the House tonight to say that the motor industry made a mistake in becoming so dependent on the United States and the North American market, but I am sure that the car industry was absolutely right to go all out to capture the valuable prize of this vast potential market. If it had dissipated its efforts all over the world it would not have been able to achieve anything


like the same success—and it was a great success—in the United States. This very success has made our industry all the more vulnerable to changes in the United States market, and it is a market which no body of planners in England can influence. If we are to export our cars, we have to take the markets of the world as we find them, and the opportunities as we find them, and I think that it is a fine thing that the motor car industry took this great opportunity while it was still there. It is still there. The United States market is still a good market for some of Britain's specialist motor cars, both for the large saloons and the sports cars.
Nevertheless, it is possibly unreasonable to expect an early return of the high overall level of the exports of a year ago, and there are two reasons for this. First of all, big shipments were made in the early part of this year to ensure that the United States' dealers had sufficient stocks to enable them to meet the expected demand without having a considerable waiting period. I am sure that those who have been loudest in their criticisms of the British motor car industry agree that it is very important to have stocks available when the customers want the goods. This is what the motor car industry set out to do in the United States.
Unfortunately, these stocks did not sell as quickly as was expected, partly because of the unexpectedly successful appearance of the new American compact cars. The dealers in the United States are now running down their stocks of British cars. In fact, between June and September of this year sales of British cars in the United States exceeded shipments on average by no fewer than 4,000 a month. That shows that the stocks are being run down, and when these stocks have been reduced to a level appropriate to the new rate of British car sales, then shipments to the United States can be expected to rise once more.
The second reason for the decline in exports to the United States is the compact car itself. As I have said, this car has been unexpectedly successful in the United States and must now be reckoned with as a permanent and strong competitor in a range which previously was not filled by American domestic production.

Mr. F. Noel-Baker: Why unexpected?

Mr. Erroll: Because it was not thought that the product would be as successful as it turned out to be, and I do not think that any working party sitting here in England could have foretold whether it would be successful or unsuccessful just a year ahead, let alone have foretold what might happen ten or fifteen years ahead, as suggested by the right hon. Gentleman.
The car makers fully realise how dependent their exports have been on a single large market, and they are exploring the full possibilities of other export markets. Indeed, at the last meeting of the National Advisory Council the motor car manufacturers agreed to my right hon. Friend's suggestion that they should make a full and fresh study of export markets. In this work all the facilities of the Board of Trade's Export Services Branch will be fully at their disposal—to the Council collectively, to the S.M.M.T. and to individual motor car manufacturers. These services have been greatly improved over the last few years and are widely appreciated by many exporters in different industries. I am confident that our services, with their reporting posts, numbering 200 all over the world, can give the British motor car exporter a useful service of up-to-date information. I mention that point particularly because the right hon. Gentleman asked whether we were doing anything about it.

Mr. Norman Cole: Even allowing for the extra cost of transport across the Atlantic, if we bear in mind the very much higher cost of living in the United States we are bound to ask why the compact car can beat our cars for price.

Mr. Erroll: I cannot answer that question. I do not know the relative prices of comparable models nor to what extent the Americans may be cutting their present profit margins in order to make sure of a place for their compact cars in the United States market.
I have said a lot about the United States, but we in Britain must look to the whole world for our export markets, and I think that I should take a minute or two in looking at world prospects. World prospects vary from the fair to the hopeless. I do not wish to weary the House


with a survey country by country, but I can make one or two generalisations which may help. In most of the main markets there are no difficulties arising from quantitative restrictions of imports. I have with me a long list of countries whose markets are freely accessble to our car exporters. Of course, some of the most important markets, particularly the European markets, offer the severe corn-petition of their own vigorous domestic car industries.

Miss Jennie Lee: Which are nationalised.

Mr. Erroll: The nationalised industry in France has suffered very much in the export markets. It has suffered equally with private enterprise firms.
The car industries in these other countries hold positions in their economies similar to that of the United Kingdom industry in the British economy. Their products are, therefore, directly competitive with those of the United Kingdom. We are competitive, and I see no reason why we should not get an increasing share of the expanding markets of Europe, despite the tariff difficulties which may have become an increasingly important factor with the passage of time.

Mr. Tomney: It is not only a question of the American markets. The British Motor Corporation has put about £60 million into Italy for the assembly of the Mini-Minor. Italian motor car producers are now cutting the price of their present models by as much as £70 below the price of the Mini-Minors.

Mr. Erroll: I agree that price changes can be made by different people. We have cut our prices in certain cases, but prices must be determined by those who are selling the vehicles. I do not think that we in the House can determine the price of privately produced vehicles.
I have here a long list of countries which impose restrictions of varying degrees of severity on the import of foreign cars. Some conditions are so severe as to make those markets virtually closed to us. Nevertheless, some important opportunities exist, and I am sure that our car exporters will take full advantage of them.
I will refer briefly to the Continents of Africa and Asia, which I know interest many hon. Members. Exports of all the principal car-producing countries to Africa in 1959 amounted to 216,000. Our share was 50,668, or nearly one-quarter of all the cars moved into Africa in 1959. The corresponding figures for Asia are even more favourable to us. A total of about 84,000 cars were shipped to Asia, of which our share was no less than 28,500.
There is one large potential market, or it is often regarded as a potential market, namely, China. The potentialities of China are often mentioned, but all foreign trade is controlled by the State Trading Corporations, and the import of cars from the West is negligible. The fact is that China has not so far been prepared to devote any appreciable part of her foreign currency to the import of cars from countries outside the Communist bloc. She is now producing her own cars on an increasing scale. From the experience of my own trade visit to China just over three years ago, I am sure that China does not represent at present any real market for British passenger cars.
The right hon. Member for Battersea, North referred to credits, and particularly to what he described loosely as "Government credits". Most export sales are still made on cash terms direct to distributors, through merchants, or through the subsidiary companies abroad of the manufacturers themselves. It is right to say that manufacturers have sound commercial reasons for being unwilling generally to concede long credit terms on passenger cars.
This is a matter for the individual car makers to decide, but I can assure the House that the facilities of the Export Credits Guarantee Department are fully available for car exporters. In fact, we are prepared to go further than the majority of car exporters wish at present, We are prepared to cover the sale and export of passenger cars on twelve-monthly credit. We are prepared to go even further when we know that other insurers are insuring for slightly longer periods. We are also prepared to go much further with the heavier types of vehicles—the lorries and the buses. We will provide up to three years' credit and, exceptionally, we will offer up to five years for very large contracts.
I have taken enough of the time of the House on the export side. I will now refer to some of the other important issues raised during the debate. Hon. Gentlemen on both sides referred to earnings and short time, particularly the hon. Members for Nuneaton (Mr. Bowles) and Bradford, East (Mr. McLeavy). Everyone in the House realises that full-time earnings in the motor industry are high. Indeed, they are amongst the highest in the country. What is important to remember is that, even when short-time working is necessary, earnings are still reasonably good when compared with whole-time earnings in many other trades.
As the degree of short-time working varies from firm to firm, I regret that I cannot give the House any useful figures for the workers in the industry as a whole, but I have tried to find an example which will give approximate figures which may be of use and interest to hon. Members. In one firm in the Midlands, a skilled production worker would obtain £20 12s. for a five-day week without overtime. He would obtain £16 4s. for a four-day week, and £12 for a three-day week. In the semiskilled trades in the same works he would get £20 for a five-day week; £14 10s. for a four-day week and £12 3s. for a three-day week.
While the earnings for a three-day week undoubtedly represent a substantial drop in the earnings for a full five-day week without overtime, nobody could suggest that earnings of £12 and over amount to real hardship, particularly as the overall average for full-time earnings in all manufacturing industry amounts to £14 16s. a week.
My hon. Friends the Members for Solihull (Mr. Lindsay) and for Harrow, West (Mr. John Page) made speeches that I would strongly commend to the House, and I would like in particular to stress parts of them. One feature was that the motor industry is one that is bound to experience certain changes in demand from time to time—

Mr. Edelman: Before he leaves the subject of wages, I am sure that the right hon. Gentleman would not wish to leave the wrong impression in the minds of hon. Members or of people outside. Is he aware that in a typical firm like Standard Motors the average take-home

earnings of a man on a three-day week are £7, nothing like the £12 that the Minister quoted?

Mr. Erroll: I produced this example in a sincere attempt to help the House. I realise that it is only an example, because it is impossible to get a good average. I gave the figures for the skilled and semi-skilled trades. I will admit that, for the unskilled trade, the take-home pay on a three-day week is considerably less—but so it should be, because the man is unskilled. Nevertheless, I am prepared quite willingly to stand by the figures I have quoted.
To return to what I was saying, I want to stress that the motor industry is one that is bound to experience certain changes in demand from time to time, and it is surely quite reasonable to expect that when workers are receiving very large earnings they should make some provision by way of personal savings for those periods when earnings are lower. But earnings and short-time are only pin of the story—there is also the question of unemployment and redundancy, matters referred to in a most interesting way by the hon. Member for Nuneaton as well as by other hon. Members.
The motor car industry is one that has expanded very rapidly, and the numbers employed have increased with it. In October 1959, the numbers employed were 405,000, and by September of this year they had risen to 445,000. The October figure for this year shows a fall to 438,000, but that is still 30,000 more than a year previously. I understand that the redundancy figure is now about 9,000—that is the latest figure we have been able to obtain—but those redundancies are almost all taking place in areas of very high employment. Unemployment in all the motor industrial areas is well under 1 per cent—well under.
The hon. Member for Coventry, North (Mr. Edelman) referred to queues of unemployed workers, sacked and dismissed, but I would point out that the vacancies are still greater than the numbers unemployed in that town of his. In fact, it is sheer nonsense for the hon. Gentleman to talk about unemployment queues—sheer nonsense. Indeed, many of the other factories in these areas, including Coventry, have been complaining that


they are unable to get all the labour they require—

Mr. Edelman: Is the Minister of State aware that quite recently, in Coventry alone, 2,200 men were dismised by Standards? If 2,200 men do not constitute a queue, what does?

Mr. Erroll: I will be the first to admit that it is inconvenient to have to change one's job, but the great majority of those made redundant have so far had little difficulty in obtaining other work.
I have brought to the House an example. I am sorry that it does not relate to Coventry, but I think it will serve its purpose well. It is the case of Vauxhall Motors, who dismissed about 950 employees in October. [HON. MEMBERS: "We have heard this."] There are several hon. Members here who were not present this afternoon and, therefore, I am repeating it and amplifying it for their benefit. Only about a dozen of these workers are now registered as unemployed with the Ministry of Labour. In mid-November there were only 500 men wholly unemployed in Luton and Dunstable together, and of these only 47 were last employed in the motor industry. I think that serves to show that a person becoming redundant in Luton has really nothing to fear in the way of prolonged unemployment today.

Mr. G. R. Mitchison: Does the right hon. Gentleman consider it better to lose one's job or be on a three-day week at £7?

Mr. Nabarro: I wish the hon. and learned Member for Kettering would lose his.

Mr. Erroll: I think that if one can get a better job at a better wage than £7 it pays to leave one job and go to another.

Mr. F. Noel-Baker: rose—

Mr. Erroll: I must get on as I have very little time and I have given way a great deal. I wish to ask hon. Members who did not hear the speeches of my hon. Friend the Member for Harrow. West and the hon. Member for Birmingham, Aston (Mr. J. Silverman) to read what they said about the unofficial strikes which occur from time to

time. I hope the House will consider very carefully what was said by my hon. Friend the Member for Solihull. I should like to say more about this matter, but industrial relations are a matter for my right hon. Friend the Minister of Labour and I do not propose to trespass on his territory tonight.

Mr. F. Noel-Baker: The right hon. Gentleman will appreciate that my constituency of Swindon is one of the areas worst hit by present circumstances. I was astonished to hear the President of the Board of Trade say earlier that he had no idea of what was happening in Swindon. Will the Minister now give urgent consideration to the employment situation in Swindon and the difficulties we face there and tell us what is being done about it?

Mr. Erroll: The percentage rate for wholly unemployed men in mid-November in Swindon amounted to 0·7 per cent.
In the few minutes which remain I want to say something about hire purchase, because several hon. Members have said that we should ease hire-purchase restrictions. I think that criticism of the hire-purchase restrictions is implicit in the Opposition Amendment, although I was interested to listen to the excellent speech of the hon. Member for Hammersmith, North (Mr. Tomney), who pronounced himself as very much against hire-purchase.

Mr. Lee: Does the right hon. Gentleman intend to answer our questions about the Ford deal?

Mr. Erroll: I did not think that there was any need to answer questions about the Ford deal because the currency aspect of the matter was dealt with admirably by my right hon. and learned Friend the Chancellor of the Exchequer. I am reserving my remarks about exports to China for the hon. Lady the Member for Blackburn (Mrs. Castle), who has intimated that she will try to browbeat me in an Adjournment debate. I thought it much better not to deprive her of that pleasure by giving my answer in advance.
Perhaps the right hon. Member for Battersea, North would now like to hear a little of the real facts about hire purchase and not the fantasy to which he


has exposed the House. In fact, hire-purchase transactions for new cars have remained very stable as a proportion of new car registrations during the last three years, and this in spite of the removal of the restrictions in 1958 and their re-imposition in April, 1960. They have been running during this period at between 20 and 23 per cent. of all new cars sold.

Mr. Mitchison: Do not the restrictions make any difference then?

Mr. Erroll: They make a difference but not in the way that hon. Members may think. They make a difference in that the purchaser has to put down rather more of his own money in order to acquire a car than he previously had to do. That is the purpose behind hire-purchase restrictions. It is part of the combined operation of the restriction of credit facilities.
Even though the restrictions were imposes in April, it was not until October of this year that the number of hire-purchase transactions for new cars fell to any significant extent below the corresponding level of 1959 when there were no restrictions in force. The point of restrictions, as I tried to explain to the right hon. Gentleman, is that they force people to put down a little more of their own money, thus helping to mop up money which would otherwise be used for the purchase of other things. [Interruption.] I am sorry that the right hon. Gentleman is so obtuse in this matter. He understands perfectly well the value of hire-purchase restrictions.
While these restrictions cannot be expected to be popular—we never intended that they should be—the fact is that they bear on only a relatively narrow section of industry. If we were to relieve the motor car industry of its share of these restrictions, we should, in order to maintain their effect on the economy, have to impose correspondingly more severe restrictions on other

products subject in hire-purchase control. I say to my hon. Friend the Member for Solihull, who thoroughly sees the need for these controls, that the timing of any general relaxation must depend on the outlook for the economy as a whole and not on the circumstances of individual industries.

The Opposition's Amendment calls on the Government to set up a working party to consider the future of the industry. But they have not said very much about their proposal in detail. It is, after all, the main feature of what they have let it be known to the Press as their Motion of censure, but the hon. Member for Newton referred to it only in very cursory terms. He has not told us anything about the working party, what it would hope to achieve, what it would do or what its functions should be. The plain fact is that there is no desire and no need for this piece of extraneous machinery.

Hon. Members opposite are only halfhearted in their support for this proposal. They put forward a similar suggestion in February, 1957. They did not think much of it because they did not even bother to vote in support of their own proposal 3½ years ago. We now have a very similar proposal which can do nothing to help the industry, and, indeed, can only hinder it in its work.

Mr. Lee: What about Fords?

Mr. Erroll: I have told the hon. Gentleman about Fords, but he displayed his usual courtesy by not listening to me.
I cannot believe that the Opposition take this proposal at all seriously. If they decide to divide the House, I am confident that they will be soundly and roundly beaten.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 317, Noes 228.

Division No. 19.]
AYES
[9.59 p.m.


Agnew, Sir Peter
Balniel, Lord
Bennett, Dr. Reginald (Gos &amp; Fhm)


Aitken, W. T.
Barber, Anthony
Berkeley, Humphry


Allan, Robert (Paddington, S.)
Barlow, Sir John
Bevins, Rt. Hon. Reginald (Toxteth)


Allason, James
Barter, John
Bidgood, John C.


Alport, Rt. Hon. C. J. M.
Batsford, Brian
Biggs-Davison, John


Amery, Rt. Hon. Julian (Preston, N.)
Baxter, Sir Beverley (Southgate)
Birch, Rt. Hon. Nigel


Arbuthnot, John
Beamish, Col. Tufton
Bishop, F. P.


Ashton, Sir Hubert
Bell, Ronald (S. Bucks.)
Black, Sir Cyril


Atkins, Humphrey
Bennett, F. M. (Torquay)
Bossom, Clive




Box, Donald
Harris, Reader (Heston)
Matthews, Gordon (Meriden)


Boyd-Carpenter, Rt. Hon. John
Harrison, Brian (Maldon)
Maudling, Rt. Hon. Reginald


Boyle, Sir Edward
Harrison, Col. J. H. (Eye)
Mawby, Ray


Braine, Bernard
Harvey, John (Walthamstow, E.)
Maxwell-Hyslop, R. J.


Brewis, John
Harvie Anderson, Miss
Maydon, Lt.-Cmdr. S. L. C.


Bromley-Davenport, Lt.-Col. W. H.
Hastings, Stephen
Molson, Rt. Hon. Hugh


Brooke, Rt. Hon. Henry
Hay, John
Montgomery, Fergus


Brooman-White, R.
Heald, Rt. Hon. Sir Lionel
More, Jasper (Ludlow)


Browne, Percy (Torrington)
Henderson, John (Cathcart)
Morgan, William


Bullard, Denys
Henderson-Stewart, Sir James
Mott-Radclyffe, Sir Charles


Bullus, Wing Commander Eric
Hendry, Forbes
Nabarro, Gerald


Burden, F. A.
Hicks Beaoh, Maj. W.
Neave, Airey


Butcher, Sir Herbert
Hiley, Joseph
Nicholls, Sir Harmar


Butler, Rt. Hn. R. A. (Saffron Walden)
Hill, Dr. Rt. Hon. Charles (Luton)
Noble, Michael


Campbell, Sir David (Belfast, S.)
Hill, Mrs. Eveline (Wythenshawe)
Nugent, Sir Richard


Campbell, Gordon (Moray &amp; Nairn)
Hill, J. E. B. (S. Norfolk)
Oakshott, Sir Hendrle


Carr, Compton (Barons Court)
Hinohingbrooke, Viscount
Orr-Ewing, C. Ian


Carr, Robert (Mitcham)
Hirst, Geoffrey
Osborn, John (Hallam)


Cary, Sir Robert
Hobson, John
Osborne, Cyril (Louth)


Channon, H. P. G.
Hocking, Philip N.
Page, John (Harrow, West)


Chataway, Christopher
Holland, Philip
Pannell, Norman (Kirkdale)


Chichester-Clark, R.
Hollingworth, John
Partridge, E.


Clark, Henry (Antrim, N.)
Holt, Arthur
Pearson, Frank (Clitheroe)


Clark, William (Nottingham, S.)
Hope, Rt. Hon. Lord John
Peel, John


Clarke, Brig. Terence (Portsmth, W.)
Hopkins, Alan
Percival, Ian



Hornby, R. P.
Peyton, John


Cleaver, Leonard
Hornsby-Smith, Rt. Hon. Patrloia
Pickthorn, Sir Kenneth


Cole, Norman
Howard, Gerald (Cambridgeshire)
Pike, Miss Mervyn


Collard, Richard
Howard, Hon. G. R. (St. Ives)
Pitt, Miss Edith


Cooper, A. E.
Howard, John (Southampton, Test)



Cooper-Key, Sir Neill
Hughes Hallett, Vice-Admiral John
Pott, Percivall


Cordle, John
Hughes-Young, Michael
Powell, Rt. Hon. J. Enoch


Costain, A. P.
Hulbert, Sir Norman
Price, David (Eastleigh)


Coulson, J. M.
Hurd, Sir Anthony
Price, H. A. (Lewisham, W.)


Courtney, Cdr. Anthony
Hutchison, Michael Clark
Prior, J. M. L.


Craddock, Sir Beresford
Iremonger, T. L.
Prior-Palmer, Brig. Sir Otho


Critchley, Julian
Irvine, Bryant Godman (Rye)
Profumo, Rt. Hon. John


Crosthwaite-Eyre, Col. O. E.
Jaokson, John
Proudfoot, Wilfred


Crowder, F. P.
Jenkins, Robert (Dulwich)
Quennell, Miss J. M.


Cunningham, Knox
Johnson, Dr. Donald (Carlisle)
Ramsden, James


Curran, Charles
Johnson, Eric (Blaokley)
Rawlinson, Peter


Currie, G. B. H.
Johnson Smith, Geoffrey
Redmayne, Rt. Hon. Martin


Dalkeith, Earl of
Jones, Rt. Hn. Aubrey (Hall Green)
Rees, Hugh


Dance, James
Joseph, Sir Keith
Rees-Davies, W. R.


d'Avigdor-Goldsmid, Sir Henry
Kaberry, Sir Donald
Renton, David


Deedes, W. F.
Kerans, Cdr. J. S.
Ridley, Hon. Nicholas


de Ferranti, Basil
Kerr, Sir Hamilton
Ridsdale, Julian


Digby, Simon Wingfield
Kershaw, Anthony
Rippon, Geoffrey


Donaldson, Cmdr. C. E. M.
Kimball, Marcus
Roberts, Sir Peter (Heeley)


Doughty, Charles
Kirk, Peter
Robertson, Sir David


Drayson, G. B.
Kitson, Timothy
Robinson, Sir Roland (Blackpool. S.)


du Cann, Edward
Lagden, Godfrey
Robson Brown, Sir William


Dunoan, Sir James
Lambton, Viscount
Rodgers, John (Sevenoaks)


Duthie, Sir William
Lancaster, Col. C. G.
Roots, William


Eden, John
Langford-Holt, J.
Ropner, Col. Sir Leonard


Elliot, Capt. Walter (Carshalton)
Leather, E. H. C.
Royle, Anthony (Richmond, Surrey)


Elliott, R. W. (Newcastle-on-Tyne, N.)
Leburn, Gilmour
Russell, Ronald


Emery, Peter
Legge-Bourke, Sir Harry
Sandys, Rt. Hon. Duncan


Errington, Sir Eric
Lewis, Kenneth (Rutland)
Scott-Hopkins, James


Erroll, Rt. Hon. F. J.
Lilley, F. J. P.
Seymour, Leslie


Farey-Jones, F. W.
Lindsay, Martin
Sharples, Richard


Farr, John
Linstead, Sir Hugh
Shaw, M.


Finlay, Graeme
Litchfield, Capt. John
Shepherd, William


Fisher, Nigel
Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield)
Simon, Sir Jocelyn


Forrest, George
Lloyd, Rt. Hon. Selwyn (Wirral)
Skeet, T. H. H.


Foster, John
Longbottom, Charles
Soames, Rt. Hon Christopher


Fraser, Ian (Plymouth, Sutton)
Loveys, Walter H.
Spearman, Sir Alexander


Freeth, Denzil
Low, Rt. Hon. Sir Toby
Speir, Rupert


Galbraith, Hon. T. G. D.
Lucas, Sir Jocelyn (Portsmouth, S.)
Stanley, Hon. Richard


Gammans, Lady
Luoas-Tooth, Sir Hugh
Stevens, Geoffrey


Gardner, Edward
McAdden, Stephen
Steward, Harold (Stockport, S.)


George, J. C. (Pollok)
MacArthur, Ian
Stoddart-Scott, Col. Sir Malcolm


Gibson-Watt, David
MoLaughlin, Mrs. Patricla
Storey, Sir Samuel


Glover, Sir Douglas
Maclean, Sir Fitzroy (Bute &amp; N. Ayrs)
Studholme, Sir Henry


Glyn, Sir Richard (Dorset, N.)
MoLean, Neil (Inverness)
Summers, Sir Spencer (Aylesbury)


Goodhart, Philip
MaoLeod, John (Ross &amp; Cromarty)
Sumner, Donald (Orpington)


Gough, Frederick
McMaster, Stanley R.
Talbot, John E.


Gower, Raymond
Macmillan, Rt. Hn. Harold (Bromley)
Tapsell, Peter


Grant, Rt. Hon. William (Woodside)
Maopherson, Niall (Dumfries)
Taylor, Sir Charles (Eastbourne)


Gram-Ferris, Wg Cdr. R. (Nantwich)
Maginnis, John E.
Taylor, Edwin (Botton, E.)


Green, Alan
Maitland, Sir John
Taylor, W. J. (Bradford, N.)


Gresham Cooke, R.
Manningham-Buller, Rt. Hn. Sir R.
Teeling, William


Grimond, J.
Markham, Major Sir Frank
Temple, John M.


Grimston, Sir Robert
Marlowe, Anthony
Thatcher, Mrs. Margaret


Gurden, Harold
Marples, Rt. Hon. Ernest
Thomas, Leslie (Canterbury)


Hamilton, Michael (Wellingborough)
Marten, Neil
Thomas, Peter (Conway)


Harris, Frederio (Croydon, N. W.)
Mathew, Robert (Honlton)
Thompson, Kenneth (Walton)







Thompson, Richard (Croydon, S.)
Wade, Donald
Wills, Sir Gerald (Bridgwater)


Thorneycroft, Rt. Hon. Peter
Wakefield, Sir Wavell (St. M'lebone)
Wilson, Geoffrey (Truro)


Thornton-Kemsley, Sir Colin
Walker-Smith, Rt. Hon. Sir Derek
Wolrige-Gordon, Patrick


Tiley, Arthur (Bradford, W.)
Ward, Dame Irene (Tynemouth)
Wood, Rt. Hon. Richard


Tilney, John (Wavertree)
Watkinson, Rt. Hon. Harold
Woodhouse, C. M.


Turner, Colin
Watts, James
Woodnutt, Mark


Turton, Rt. Hon. R. H.
Webster, David
Woollam, John


van Straubenzee, W. R.
Wells, John (Maidstone)
Worsley, Marcus


Vane, W. M. F.
Whitelaw, William
Yates, William (The Wrekin)


Vickers, Miss Joan
Williams, Dudley (Exeter)



Vosper, Rt. Hon. Dennis
Williams, Paul (Sunderland, S.)
TELLERS FOR THE AYES:




Mr. E. Wakefield and Mr. Bryan.




NOES


Abse, Leo
Grey, Charles
Moyle, Arthur


Ainsley, William
Griffiths, David (Rother Valley)
Mulley, Frederick


Albu, Austen
Griffiths, Rt. Hon. James (Llanelly)
Neal, Harold


Allaun, Frank (Salford, E.)
Griffiths, W. (Exchange)
Noel-Baker, Francis (Swindon)


Allen, Scholefield (Crewe)
Gunter, Ray
Oliver, G. H.


Awbery, Stan
Hall, Rt. Hon. Clenvil (Colne valley)
Oram, A. E.


Bacon, Miss Alice
Hamilton, William (West Fife)
Oswald, Thomas


Baxter, William (Stirlingshire, W.)
Hannan, William
Owen, Will


Beaney, Alan
Hart, Mrs. Judith
Padley, W. E


Bellenger, Rt. Hon. F. J.
Hayman, F. H.
Pagat, R. T.


Bence, Cyril (Dunbartonshire, E.)
Henderson, Rt. Hn. Arthur (Rwly Regls)
Panned, Charles (Leeds, W.)


Benson, Sir George
Herbison, Miss Margaret
Pargiter, G. A.


Blackburn, F.
Hewitson, Capt. M.
Parker, John (Dagenham)


Blyton, William
Hill, J. (Midlothian)
Parkin, B. T. (Paddington, N.)


Bowden, Herbert W. (Leics, S. W.)
Hilton, A. V.
Pavitt, Laurence


Bowles, Frank
Holman, Percy
Pearson, Arthur (Pontypridd)


Boyden, James
Houghton, Douglas
Peart, Frederick


Braddock, Mrs. E. M.
Howell, Charles A.
Pentland, Norman


Brockway, A. Fenner
Hoy, James H.
Plummer, Sir Leslie


Broughton, Dr. A. D. D.
Hughes, Cledwyn (Anglesey)
Popplewell, Ernest


Brown, Alan (Tottenham)
Hughes, Emrys (S. Ayrshire)
Prentice, R. E.


Brown, Rt. Hon. George (Belper)
Hughes, Hector (Aberdeen, N.)
Price, J. T. (Westhoughton)


Brown, Thomas (Ince)
Hunter, A. E.
Probert, Arthur


Butler, Herbert (Hackney, C.)
Hynd, John (Attercliffe)
Proctor, W. T.


Butler, Mrs. Joyce (Wood Green)
Irvine, A. J. (Edge Hill)
Pursey, Cmdr. Harry


Callaghan, James
Irving, Sydney (Dartford)
Randall, Harry


Castle, Mrs. Barbara
Janner, Barnett
Rankin, John


Chetwynd, George
Jay, Rt. Hon. Douglas
Redhead, E. C.


Cliffe, Michael
Jeger, George
Reid, William


Collick, Percy
Jenkins, Roy (Stechford)
Reynolds, G. W


Corbet, Mrs. Freda
Johnson, Carol (Lewisham, S.)
Rhodes, H.


Craddock, George (Bradford, S.)
Jones, Rt. Hn. A. Creech (Wakefield)
Roberts, Goronwy (Caernarvon)


Cronin, John
Jones, Dan (Burnley)
Robinson, Kenneth (St. Pancras, N.)


Crosland, Anthony
Jones, Jack (Rotherham)
Ross, William


Crossman, R. H. S.
Jones, J. Idwal (Wrexham)
Shinwell, Rt. Hon. E.


Cullen, Mrs. Alice
Jones, T. W. (Merioneth)
Short, Edward


Darling, George
Kelley, Richard
Silverman, Julius (Aston)


Davies, G. Elfed (Rhondda, E.)
Kenyon, Clifford
Silverman, Sydney (Nelson)


Davies, Harold (Leek)
Key, Rt. Hon. C. W.
Skeffington, Arthur


Davies, Ifor (Gower)
King, Dr. Horace
Slater, Mrs. Harriet (Stoke, N.)


Davies, S. O. (Merthyr)
Lawson, George
Slater, Joseph (Sedgefield)


Deer, George
Ledger, Ron
Small, William


de Freitas, Ceoffrey
Lee, Frederick (Newton)
Smith, Ellis (Stoke, S.)


Delargy, Hugh
Lee, Miss Jennie (Cannock)
Snow, Julian


Dempsey, James
Lever, Harold (Cheetham)
Soskice, Rt. Hon. Sir Frank


Diamond, John
Lewis, Arthur (West Ham, N.)
Spriggs, Leslie


Dodds, Norman
Lipton, Marcus
Steele, Thomas


Donnelly, Desmond
Loughlin, Charles
Stewart, Michael (Fulham)


Driberg, Tom
Mabon, Dr. J. Dickson
Stonehouse, John


Dugdale, Rt. Hon. John
MaoColl, James
Stones, William


Ede, Rt. Hon. Chuter
McInnes, James
Strachey, Rt. Hon. John


Edelman, Maurice
McKay, John (Wallsend)
Strauss, Rt. Hn. G. R. (Vauxhall)


Edwards, Rt. Hon. Ness (Caerphilly)
McLeavy, Frank
Stross, Dr. Barnett (Stoke-on-Trent, C.)


Edwards, Robert (Bilston)
MacMillan, Malcolm (Western Isles)
Summerskill, Dr. Rt. Hon. Edith


Edwards, Walter (Stepney)
MacPherson, Malcolm (Stirling)
Swain, Thomas


Evans, Albert
Mallalieu, E. L. (Brigg)
Swingler, Stephen


Fernyhough, E.
Mallalieu, J. P. W. (Huddersfield, E.)
Syivester, George


Finch, Harold
Manuel, A. C.
Symonds, J. B.


Fitch, Alan
Mapp, Charles
Taylor, Bernard (Mansfield)


Fletcher, Eric
Marsh, Richard
Thomas, George (Cardiff, W.)


Foot, Dingle (Ipswich)
Mason, Roy
Thomas, Iorwerth (Rhondda, W.)


Foot, Michael (Ebbw Vale)
Mayhew, Christopher
Thomson, G. M. (Dundee, E.)


Forman, J. C.
Meillsh, R. J.
Thornton, Ernest


Fraser, Thomas (Hamilton)
Mendelson, J. J.
Timmons, John


Gaitskell, Rt. Hon. Hugh
Millan, Bruce
Tomney, Frank


Galpern, Sir Myer
Milne, E. J.
Ungoed-Thomas, Sir Lynn


George, Lady Megan Lloyd
Mitchison, G. R.
Wainwright, Edwin


Ginsburg, David
Monslow, Walter
Warbey, William


Gooch, E. G.
Moody, A. S.
Watkins, Tudor


Gordon Walker, Rt. Hon. P. C.
Morris, John
Weitzman, David


Gourlay, Harry
Mort, D. L.
Wells, Percy (Faversham)







Wells, William (Walsall, N.)
Willey, Frederick
Wyatt, Woodrow


White, Mrs. Elrene
Williams, D. J. (Neath)
Yates, Victor (Ladywood)


Whitlock, William
Williams, W. R. (Openshaw)
Zilliacus, K.


Wigg, George
Willis, E. G. (Edinburgh, E.)



Wilcock, Group Capt. C. A. B.
Wilson, Rt. Hon. Harold (Huyton)
TELLERS FOR THE NOES:


Wilkins, W. A.
Winterbottom, R. E.
Mr. J. Taylor and




Mr. G. H. R. Rogers

Main Question again proposed.


Mr. Ray Mawby (Totnes) rose—


It being after Ten o'clock, the debate stood adjourned.


Committee Tomorrow.

Orders of the Day — LEGAL AID AND ADVICE (ENGLAND AND WALES)

10.11 p.m.

Sir Lynn Ungoed-Thomas: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Legal Aid (Assessment of Resources) Regulations, 1960 (S.I., 1960, No. 1471), dated 16th August 1960, a copy of which was laid before this House on 19th August, in the last Session of Parliament, be annulled.

Mr. Speaker: I understand that it would be convenient to hon. Members if this and the following Prayer, which relates to Scotland, were discussed together. If need be, they must be divided against separately.

Miss Margaret Herbison: If these two Prayers are to be taken together, it seems to me that Scottish Members will be placed in a difficulty, because I see no one on the Treasury Bench who is a Scottish legal expert.

Mr. Speaker: In that case, they must be taken separately. I am obliged to the hon. Lady.

Sir L. Ungoed-Thomas: As the Scottish language involves difficulties, quite apart from those of the English language which we have in this Statutory Instrument, perhaps it is as well that they should be taken separately, Mr. Speaker.
This Prayer is purely a probing Prayer, and all we want to know is precisely what these Regulations involve, what amendments are involved in them, and what is the policy behind the amendments. All we have at the moment is a very short Explanatory Note. We have emphasised before, in debates here, the importance, in connection with these Regulations, of having readily available for solicitors and laymen who work the legal aid provisions perfectly clear statements in a readily understandable and accessible form so that they can easily see what are the effects of any Regulations that are brought in.
To find out the effect of these Regulations, one has to compare them with the former Regulations, the amendments to

the former Regulations and then the amendments produced in these Regulations, involving each person who wishes to find out the precise effect of these Regulations in a very considerable amount of rather intricate work.
We have pressed before for clearer statements of the precise effects of amendments. Until the Department responsible for Regulations of this kind produce amendments in readily understandable form, so that the effect of the amendments can easily be seen, we shall continue to pray against each set of amendments. I have said that before and I repeat it now, and it is for that reason that we are somewhat unnecessarily—since this could have been avoided if the proper steps had been taken—praying against the Regulations. I hope that as a result, at any rate in HANSARD, we shall have a clear and concise statement of the effect of the Regulations.
The Explanatory Note says:
These Regulations consolidate, with amendments, the Legal Aid (Assessment of Resources) Regulations, 1950, and subsequent amending Regulations.
It does not say precisely what those amendments are, but it adds:
They include amended provisions for the assessment of resources where applications for legal aid are made by or on behalf of children …
and it then mentions specific cases.
There is no indication, even in general terms, of whether the amendments are more or less beneficial to the applicants, or whether they make the tests for income and capital resources more or less stringent. When we consider the first of the amended provisions which are specifically mentioned, namely, those relating to applications for legal aid by or on behalf of children, we find, in Regulation 5:
Where an application for a certificate is made by or on behalf of an infant who is under the upper limit of compulsory school age, there may, in addition to the resources of the infant, be taken into account the disposable income and disposable capital of such other person or persons, being one or more of the following persons, as the Board, having regard to all the circumstances, including the age and resources of the infant, may decide. …
It then refers to those who are liable under the National Assistance Act, 1948, to maintain the infant, and certain persons having the care and control of


the infant. I gather that that is a fairly stringent provision which is not in the favour of, but against, the interest of the infant.
Am I correct in my interpretation of that Regulation? If I am, why has that course been taken? What is the policy behind Regulation 5? If we have such an important departure, not just in detail on enumeration of means or anything of that sort, but in policy, why do we not have a more precise reference to it in the Explanatory Note, specifically drawing attention to the fact that the resources of infants in these cases are to be more stringently considered than they were before?
What we want is a detailed statement of the effect of each of the amendments and, particularly in the case of infants and the Regulation I have mentioned, we would like to have a statement not only as to the effect of the Amendment, but about what induced the Government to embark upon what appears to be a departure in policy towards the assessment of the resources of infants.
I hope that those are matters which can easily be disposed of by the Solicitor-General, but they are matters which could easily have been disposed of by the Explanatory Note itself, or by an accompanying document making the position absolutely clear. It is only because of the absence of such clarification that we have been driven on this, as on other occasions, to pray against Legal Aid and Advice Regulations.

10.20 p.m.

The Solicitor-General (Sir Jocelyn Simon): I respond gladly and willingly to the invitation of the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas). I agree with him that the Explanatory Note is a short one; but I am bound to say that it follows very much, and is considerably longer than, the Explanatory Note that was appended to the 1950 Regulations, which are the original Regulations, and it draws the attention of hon. Members—or that is its intention—to where the law is amended.
This is a sphere where it is rather difficult to strike the right balance in an Explanatory Note, because the only alternative is to go into great detail and to over-burden the Statutory

Instrument. I appreciate that this Note is on the short side, and I will certainly bear in mind what the hon. and learned Gentleman said and do my best to repair any deficiencies tonight.
He asked me particularly to deal with the position of infant applicants. In this respect, the Regulations are not made more stringent. They are varied in the interest and in favour of the infant applicant. I think it fair to say that that is the general effect of these Regulations. It is to introduce a new flexibility that a great number of improvements have been made in favour of the applicants. In only two cases is the test made more stringent, and that in a very minor respect.
If hon. Members would be good enough to look at the 1950 Regulations, they will see that in Regulation 5 the test laid down there for an application made by an infant was that
… there may, in addition to the resources of the infant, be taken into account to an extent not exceeding that provided in paragraph (4) of this regulation the disposable income and disposable capital …
of various other classes of persons.
The first class is any person who is liable to maintain the infant under the National Assistance Act. Thus Regulation 5 (1, i)—I hope this is not an inconvenient way of dealing with it—of the Regulations which are the subject of the Motion, is no more than a re-enactment of the 1950 provision.
As the hon. and learned Gentleman well knows, the persons referred to there are the father and mother, including the putative father, when adjudged, and the mother of an illegitimate child. I realise that I have used a term which is not used in Scotland, but my right hon. and learned Friend the Lord Advocate will no doubt be dealing with the translations in due course.
The second 1950 class which had to be regarded was
any person having the care and control of the infant not being a person having such care and control by reason of any contract or for some temporary purpose.
There again Regulation 5 (1, ii) of the 1960 Regulations is only a re-enactment.
In addition, there was a third class in 1950, namely,
a person who usually contributes substantially to the infant's maintenance, being a parent, step-parent, or near relative of the infant.


That class of contributor has disappeared, so there one has an improvement in favour of the applicant.
The matter does not by any means rest there, because the 1950 Regulations applied to all dependent children, whether below or above school-leaving age. In the case of children above school-leaving age, that resulted in considerable anomalies, and, in some cases, in considerable hardship. I can give the House an example. There were two cases which came to note at about the same time. The first one was that of a senior civil servant whose son was under 21 and at a university. He had done his National Service and worked as a dustman during the vacation. He therefore had an income of his own and was not a dependent child within the meaning of the 1950 Regulations. There was therefore no contribution payable in respect of him. At about the same time there came another case where the son of a skilled artisan, who had a very much lower income, was at a grammar school prior to going to university. The father there had to make a substantial contribution towards his son's assessment.
The House will appreciate that the infants in both these cases had law suits pending. The father in the second case had to make a substantial contribution, although, as I say, his income was very much lower than that of the father in the first case. That is obviously indefensible, and what the new Regulations have done is to limit the contribution by the classes of persons in Regulation 5 (1, i) and (1, ii)—of course with the mother and father being the most important—to the case of an infant who is under the upper limit of compulsory school age. Therefore, in both types of the cases that I have mentioned, where there is a child who is above school age the parent is not required to be a contributor under Regulation 5. We feel that that is a right step to take, otherwise one is penalising those parents who are already making sacrifices for their children.
I hope that with that explanation the House will see that in two respects, particularly in the latter one where we have taken out the liability of the parents to contribute towards the costs of infants who are above school age, there is a substantial improvement in favour of the applicant.
It might be convenient to draw attention now—

Sir L. Ungoed-Thomas: Before the Solicitor-General leaves that point, is it correct that under Regulation 5 there is no limit to the disposable income of the adult whose income is taken into account? Has there been any alteration in that respect? Will the hon. and learned Gentleman also he good enough to make some observations on Regulation 5 (2)?

The Solicitor-General: I am not quite sure that I understand the hon. and learned Gentleman's first question. Do I understand him to mean: Is the parent, under Regulation 5 (1, i) bound to contribute, whatever his means are?

Sir L. Ungoed-Thomas: Yes, there is no limit put on the contribution or on the means test.

The Solicitor-General: If the hon. and learned Gentleman will turn to the first page, to the definitions, he will see:
'the person concerned' means the person whose disposable income and disposable capital are to be determined or the person whose resources are to be treated as the resources of any other person, as the case may require.
Therefore, that phrase attracts the various allowances and limits that are set out in the First and Second Schedules. Subject to that, of course, one is thrown back on the provisions of the Statute. For example, if we get, under Regulation 5 (1, 1), the father of an infant applicant whose capital and income are above the upper income and capital limits of the Act, then the child himself is outside the Act. I think that is the point that the hon. and learned Gentleman was making. But that is, of course, subject to the various disregards and allowances.

Sir L. Ungoed-Thomas: I appreciate the explanation. The difficulty I feel about that is that "the person concerned," on the definition of which the hon. and learned Gentleman relied for his explanation, is not a phrase which is used in Regulation 5 at all. Therefore, I feel some difficulty in saying that one can rely on the definition of a "person concerned" to produce the limitation in Regulation 5.
The substance of the point that I want clarified is whether, in fact, there has


been any difference at all in the test of the adult person's contribution under Regulation 5 as compared with the corresponding Regulation before these amending Regulations were brought in.

The Solicitor-General: No, not under Regulation 5 itself, but all the income limits and the capital limits have been adjusted either in the 1959 Regulations or in these Regulations in favour of the applicant. I hope I have made that clear. In the case under Regulation 5 (1, i) the father's income is aggregated with the child's income and the father's capital with the child's capital, and those two aggregates are then subject to the test of the main Act but subject to the various allowances, disregards, etc., which are set out in the Schedule.

Sir L. Ungoed-Thomas: That is the position immediately before these Regulations?

The Solicitor-General: Immediately before. The only changes in the Regulations are the various changes in the disregards, to which I shall refer shortly, such as improvements from the point of view of the ownership of a house, insurance policies and so on.
The hon. and learned Gentleman asked me also to deal with Regulation 5 (1, ii). That, as I say, is no more than a re-enactment of the 1950 Regulations, and it covers, I imagine, such people as grandparents who are looking after orphan grandchildren, children the marriage of whose parents has broken up, children whose parents are abroad, children living permanently with an aunt, uncle and so on. It expressly excludes persons having care and control by reason of any contract or for some temporary purpose, as in the case of a child staying with somebody while the parents are abroad, say, for a month or so, or, for example, the case of the schoolmaster or schoolmistress.
I do not know whether it would be convenient if I said something about some of the other respects in which the Regulations effect substantial improvement. The first is in respect of deductions for tax. The effect of the 1950 arrangement was that in certain cases the Board computed the liability for Income Tax on the income of an

applicant for legal aid after deducting employment expenses such as travelling expenses. Those were a permissible deduction under the 1950 Regulations for determining the rate of tax.
What the 1960 Assessment of Resources Regulations aim at doing is arriving at the net amount—the disposable amount—in the hands of the applicant. Therefore, the administrators, who operate these matters realistically, consider what is left after payment of tax. Among other things, however, they say that to earn one's income one may have to incur expenses in travelling to and from work, and that is taken into account under these Regulations, although it is not a matter that is taken into account by the Inland Revenue. Travelling expenses to work cannot be claimed as a permissible deduction for tax. The result of that was that under the 1950 Regulations the Board was allowing too small an amount of tax in its computation of disposable income, and we have taken the opportunity of putting that right.
Another important respect in which a change has been made is with regard to the resources of a spouse. Regulation 4 (2) (i) of the 1950 Regulations provides that
The resources of the spouse of the person concerned shall not be treated as his or her resources if—
(i) the proceedings in respect of which the application for a certificate is made are a matrimonial cause.
Paragraphs (ii) and (iii) do not matter for the moment.
The corresponding Regulation of the 1960 Regulations is also Regulation 4 (2) (i) which states:
The resources of the spouse of the person concerned shall not be treated as his or her resources if:—
(i) the spouse has a contrary interest in the dispute in respect of which application for a certificate is made.
This is one respect in which we have tightened up the Regulation against the applicant at the same time as, in another respect, making it more favourable.
As I have pointed out, the 1950 Regulations provided that there should not be aggregation where the proceedings for which legal aid was sought were a matrimonial cause, but there may be


other suits between spouses which are not matrimonial. With increasing frequency nowadays we get running-down actions, actions for negligence in driving, brought by a wife against her husband and by a husband against his wife. Obviously, if that is a proper matter to be litigated, it should attract legal aid, but it was not covered by the 1950 Regulations. In respect of that, therefore, the 1960 Regulations are more favourable.
But at the same time the 1950 Regulations did not take into account the fact that the litigation between spouses, even in a matrimonial cause, might be after one of the spouses had remarried. For example, after the wife had remarried she might want to engage in a dispute about the custody of the child of the first marriage, she having married a man well able to finance the litigation himself. So we have provided for that in Regulation 4 (2, i). It states:
The resources of the spouse of the person concerned shall not be treated as his or her resources if the spouse has a contrary interest in the dispute in respect of which the application for a certificate is made.
In other words, the spouse in this case, being the second husband, as the Regulation is redrawn would have his resources aggregated with those of the wife.
I hope that I am not taking up too much time, but the hon. and learned Gentleman invited me to explain the somewhat detailed respects in which these Regulations depart from the previous Regulations. First, I will deal with the allowances against income. The 1950 Regulations—that is Paragraph 7 of Part II of the First Schedule—authorised the Board to make allowances only in respect of certain specified relationships. The 1960 Regulations—and that is Paragraph 10 of the First Schedule—remove that restriction and therefore are very much more realistic. They enable the Board to take account of the applicant's actual commitments to various relatives, and, what is more, they improve the allowances.
Paragraph 5 (ii) of Part 2 of the First Schedule of the 1950 Regulations made allowances in favour of persons paying maintenance to a separated wife. Paragraph 11 of the First Schedule of the 1960 Regulations extends this provision to persons paying maintenance for a former spouse or child or a relative even

if they are living outside the household, so, again, it is looking at the reality of the charges on the applicant's income. I think that that is the main thing to which I should draw the attention of the House on the allowances against income.
Perhaps I ought also to mention that paragraph 10 (1, b) provides for allowances in the case of a dependent child or a dependent relative, and those are now related to the National Assistance scale. Therefore, a child attracts an allowance of between £50 and £70, according to age, and the dependent relative attracts about the same allowance as the wife—I think it is about £95 if over the age of 21.
I turn to the rules for computing disposable capital. The first improvement and amendment is in relation to the value of the house. It may be easiest if I go straight to the 1960 Regulations and then remind the House of what was in the 1950 Regulations. The capital allowances are dealt with in the Second Schedule, and Paragraph 9 (2) states:
There shall be taken into account one half of the amount by which the value of the dwellinghouse, after deducting therefrom the amount of any encumbrance charged thereon, exceeds £3,000.
That compares with £2,000 in the 1950 Regulations. The proviso is new:
. . the Board shall not take into account any sum in respect of the value of the dwellinghouse if it appears to the Board to be inequitable or impracticable to do so.
That again introduces a new flexibility in favour of the applicant and takes cognizance of the fact that in times of credit stringency it may be virtually impossible for the owner of the dwellinghouse to raise a mortgage on it to pay for litigation.
The second matter to which perhaps I ought to refer is in respect of insurance policies. In the proviso to Paragraph 11 of the Second Schedule there is a double improvement. The first is that the figure of £75, which was formerly the amount allowed in respect of insurance policies, is raised to £125; and, secondly, it is only the excess over £125 which is brought into computation, whereas formerly if the insurance policies were over £75 the whole amount was brought in.
I now turn to Paragraph 14 of the Second Schedule, which deals with the case
Where the person concerned has living with him one or more of the following persons, namely:—

(a) a spouse whose resources are required to be treated as his for the purpose of these Regulations;
(b) a dependent child;
(c) a dependent relative wholly or partly maintained by him;"

Then the Paragraph provides for a scale of allowances increasing according to the number of persons who are living with the person concerned. That is an improvement on the 1950 Regulations, which imposed a limit of £75 on the amount which might be allowed by the Board in respect of relatives. Quite obviously, if there is a large household of relatives it can be a considerable drain on the resources of the person concerned, and we felt it right to make these more generous allowances.
I think I ought to draw particular attention to Paragraph 15 because it is there in response to a plea made by the hon. and learned Member when we were debating the Legal Aid Act, 1960. It is to meet the case he put where there is a person with a very low income. He pointed out, it seemed to me quite rightly and cogently, that it is very hard on such a person to require him to exhaust the whole of what little capital he has put by. I hope that meets the sort of case the hon. and learned Member had in mind. It provides that
Where the disposable income of the person concerned is less than £375, there shall be an allowance of a sum equal to the difference between the amount of the disposable income and £375.
I will explain how that would work out. Let us suppose that a person's disposable income is calculated at less than £375—that is, the lower limit of disposable income, £250, plus the lower limit of disposable capital, £125. The amount by which his disposable income falls below £375 is allowed against his capital. If a person has a disposable income of £200, for example, he would have an allowance against capital under paragraph 15 of £175.
I hope that I have dealt with the principal points, although there are a number of minor matters and a considerable

number of what the House I am sure will agree are drafting improvements. We have considerably compressed the Regulations. If there is any other matter with which the hon. and learned Gentleman would like me to deal, I shall do my best to deal with it.

10.52 p.m.

Sir L. Ungoed-Thomas: May I thank the Solicitor-General for his very full and courteous reply. We are glad to know that some of the arguments which were put on another occasion, although strongly opposed on that occasion, have now been accepted and embodied in the Regulations.

The Solicitor-General: I was noncommittal on that occasion but certainly not antagonistic.

Sir L. Ungoed-Thomas: He and I are both fully aware of the length of time which it takes for valid arguments to penetrate some people. We are very pleased that these arguments have had some effect on the Government, even after some months.
What the Solicitor-General said does not mollify our attitude about this Explanatory Note or the Explanatory Note which has been given on previous occasions. It would have been very helpful, for instance, if in this Explanatory Note the general statement had been made that all the amendments were beneficial to the applicant except in certain specified instances, and most of the beneficial amendments could have been stated extremely shortly. For example, in dealing with Regulation No. 5, which is the main Regulation to which attention has been directed, it could have been stated very briefly in the Explanatory Note that this had a beneficial effect in that it imposes the upper limit of the compulsory school age and prevents the one section of adults from coming within the provisions to which the Solicitor-General referred. That would dispose of Regulation No. 5. But as things stand in the Explanatory Note, it is extremely complicated and it requires a great deal of work to find out the meaning.
I suggest for the Solicitor-General's consideration that when making an Explanatory Note of this kind it would be adequate to give the general effect,


showing where the amendments are beneficial and where they are made more stringent, in general terms; but, at the same time, for those who are working the Regulations, he should give the kind of detailed explanation which he gave this evening, giving examples, for which we are obliged. I press upon him again the desirability of having both general and detailed explanations—a general explanation for those of us who have to consider the subject in the House and a detailed explanation for those who have to work the Regulations. I hope that this submission tonight, which has been made previously to the Government, will at last penetrate their mind and have the same effect as other submissions have had in the past.
I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Orders of the Day — LEGAL AID AND ADVICE (SCOTLAND)

10.55 p.m.

Mr. E. G. Willis: I beg to move
That an humble Address be presented to Her Majesty, praying that the Legal Aid (Scotland) (Assessment of Resources) Regulations, 1960 (S.I., 1960, No. 1395), dated 28th July, 1960, a copy of which was laid before this House on 9th August, in the last Session of Parliament, be annulled.
We have elected to discuss our Prayer separately from the English Prayer in order to elicit from the Joint Under-Secretary of State whether or not there are any differences in these Regulations as compared with the English Regulations. The hon. and learned Gentleman the Solicitor-General has given us a fairly detailed explanation of what the Regulations do.
I want, in the first place, to reinforce the plea made by my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) concerning the Explanatory Note. I do not know what it is like in the English Regulations, but in the Scottish Regulations there is plenty of room in the document to publish al least rather more information than is published. There are two whole blank pages which could quite well have been filled with a little information about how the Regulations amend the existing ones.
Do these Regulations differ in any way at all from the English Regulations? I am not sure about that. Secondly, is there any one of the Regulations which is more stringent than the existing Regulations? I listened carefully to the Solicitor-General when he explained the English Regulations, and I heard him say that there were only two cases in which they were more stringent. I think those were his words. I did not hear him explain in what respects the new Regulations were more stringent. He went at great length into the details of the improvements which were being made, but he did not say anything about the two cases in which the Regulations were more stringent. Will the hon. Gentleman tell us about that?
One could debate the merits of some of these Regulations, but we have not much time, and to do so would mean entering into a great controversy. For


my part, I am not altogether happy with Regulations 5 (1, ii) which calls upon grandparents or aunts or other relations to make contributions in respect—

Mr. Speaker: I am sorry to interrupt the hon. Member, but there is a difficulty about this from his point of view. These Regulations consolidate, with amendments, and the principle on which I am bound to go is that we may not discuss the detail of that which is consolidation. We may discuss the amendments or the principle of consolidation.

Mr. Willis: I am indebted to you for your Ruling, Mr. Speaker. I know from experience that that is the practice, but I understood that Regulation 5 is one which has been amended.

Mr. Speaker: If I am wrong—I have been out of the Chair—I apologise to the hon. Member. I would welcome help about it if I am wrong. I thought that Regulation 5 (1, ii) was a matter of consolidation. If that is wrong, I apologise.

The Joint Under-Secretary of State for Scotland (Mr. R. Brooman-White): I think it has been amended.

Mr. Speaker: I apologise if I am wrong.

Mr. Willis: I thought that it had been amended, Mr. Speaker. As I was saying, I do not like this business of assessing the income of the grandparents on behalf of some child whom they happen to be looking after because the parents have parted. That seems to be rather hard. I wonder whether in the fourth line of Regulation 5 (1) the words
there may, in addition to the resources of the juvenile, be taken into account the disposable income and disposable capital of such other person
are permissive and not obligatory. In other words, is the case to be judged on its merits?
As you have pointed out, Mr. Speaker, where no change is made, it is rather difficult to discuss the matter, but I would like that issue to be cleared up, because it strikes me that unless this power is permissive, it is likely to be rather hard on people who are doing a useful job in case of distress, and I cannot see why they should be penalised because of that. I hope that the hon.

Gentleman will give us the benefit of his wisdom on these Regulations.

11.5 p.m.

The Joint Under-Secretary of State for Scotland (Mr. R. Brooman-White): I am replying to the debate because the responsibilities in England and Scotland are not exactly parallel. In England, I understand, it is the Lord Chancellor who has both political and administrative functions, but in Scotland my right hon. and learned Friend has purely legal functions and the administration of these Regulations is the responsibility of the Secretary of State.
In passing, I add that I have noted that the Statutory Instruments are signed, as is customary, by two Lords Commissioners of the Treasury. I was not one of those who signed the Instruments, but, if I had been, I can assure the hon. Member for Edinburgh, East (Mr. Willis) and the hon. Lady the Member for Lanarkshire, North (Miss Herbison) that I would have given it all the consideration which Lords Commissioners normally give to such matters before endorsing them.
I echo what my right hon. and learned Friend the Solicitor-General said about the Explanatory Note. It is brief. There is paper available, as the hon. Member for Edinburgh, East pointed out, but the difficulty was that a fuller explanation could have caused certain confusion in singling out instances. This brief explanation was intended to pinpoint the main subjects of change, which are quite comprehensible to those who are cognisant with the Regulations. But we have noted the wish of hon. Members that, where possible, in future the Note should be more explicit.
The general substance of the Scottish is very little different from the English Regulations, and I shall not weary the House by repeating what my right hon. and learned Friend has already said. The object is that the financial provisions on both sides of the Border shall be similar, and the Scottish Regulations simply put in our own phraseology and in our context the same provisions. We have common benefits on both sides of the Border, which, I think, are generally welcome.
With his usual perspicacity, the hon. Member for Edinburgh, East put his finger on the novel and perhaps most


debateable of the new Regulations—5 (1, ii). This is a new provision in Scotland, and in some measure it is the one change of any substance which is less favourable to the applicant than were the previous Regulations. It is provided that account may be taken of the resources of anyone who has the care or control of the juvenile, which has not been the case before.
It seemed reasonable that if a person who had the care and control of a juvenile was able to contribute towards the legal costs, and if he was paying for the maintenance of a juvenile and might in compensation have certain benefits, he should make some contribution. The categories, which are broadly set out in Regulation 5, draw a distinction between the person who is employed, the foster parent, for a fee to look after the child—and it is readily accepted that there is no reason why he should be involved in risking his capital in an endeavour to remedy the position of the child—and the relative who is looking after the child virtually as a member of his own family. It is in the case of the relative who has accepted responsibility for the child and who is bringing him up as a member of his own family that it is left to the discretion of the Board, if the merits of the case in the opinion of the Board justify it, to decide that some contribution should be made by that person.
That was the main issue raised by the hon. Member for Edinburgh, East. The only other one in which there is a slight tightening of the Regulations, which is paralleled between England and Scotland, is in the assessment of resources, which my hon. and learned Friend the Solicitor-General has explained. I hope that, with that explanation, the hon. Lady the Member for Lanarkshire, North, and the hon. Member for Edinburgh, East, will accept these regulations for Scotland.

11.6 p.m.

Miss Margaret Herbison: There is just one point I should like to raise. It arises on Regulation 5 (I, ii). I am glad that my hon. Friend the Member for Edinburgh, East (Mr. Willis) brought this into the open. The Joint Under-Secretary of State has said that one could not expect a foster-parent—in other words, one who has taken the child for payment—to pay any legal costs. All of us would accept that.
Supposing, however, that a relative takes a child. Relatives sometimes take in a child out of kindness or out of a sense of duty. It seems wrong in such circumstances that when they are providing a good home for the child, using income of their own to keep it—perhaps providing education as well—they should, when it comes to legal aid, have to make any contribution.
I know that this is permissive. Perhaps the Joint Under-Secretary of State would explain under what circumstances the Government expect that such people would be asked for a contribution. This is an innovation, and the Government must have had some specific cases in mind. The Joint Under-Secretary of State has not made a case for this change. I hope that even at this late hour he will be able to give us just those considerations which made the Government decide to bring in this further rule.

11.7 p.m.

Mr. Brooman-White: The essence of the matter is that this is permissive. The sort of circumstances which I would envisage, without having conducted very profound research into the subject, is that if, in the opinion of the Board, the people looking after the child were reasonably well-to-do, and were in a position, without serious hardship to themselves, to make a contribution, and their further responsibility for maintaining the child would be materially diminished by the success of the legal case, the Board might consider it fair to ask for a contribution. In addition, if the case succeeded, the child might be well-off and, out of the additional funds available to it, the cost of its future maintenance might be mitigated for the people looking after it.

11.10 p.m.

Mr. Willis: That is surely not the case envisaged by the Board. Let us take the case of a marriage breaking up, with an aunt or uncle or grandparent taking care of the child. It is surely wrong to penalise them if, because of the result of a court action, they might have to pay less for the upkeep of the child. After all, they are doing this in a voluntary and kindly manner. They are doing socially a very necessary piece of work. Why penalise them?

Mr. Brooman-White: The short answer is that they are not penalised. It is a question of the Board having discretion to take their resources into consideration when assessing the contribution that should be made by the child in pursuing this case on behalf of the child.

Miss Herbison: But if after the assessment is made it is decided that these people who have in a kindly manner taken the child have to make a contribution to this legal case—if it is decided after everything has been taken into account—then that is penalising.

Mr. Brooman-White: No, they are making a contribution. Their resources are being taken into account in assessing what contribution should be made on the child's behalf out of moneys available to the child in trying to further the case that would be beneficial to the child's future.
It is wrong to assume they are being penalised. It may mean a higher contribution is exacted from the child in pursuing the child's case rather than money being taken from the taxpayer. That is not a direct charge on them, it is an assessment for the pursuing of the child's case.

Miss Herbison: rose—

Mr. Speaker: At present there are three hon. Members on their feet. The hon. Lady requires the leave of the House to make a further speech.

Miss Herbison: By leave, it seems to me that, after all this probing by my hon. Friend the Member for Edinburgh, East (Mr. Willis), in that very last statement the Joint Under-Secretary completely changed his case. It seemed that he changed it by the Lord Advocate whispering to him. This seems to prove conclusively that when we asked to have this matter taken separately, which we would not have done if the Lord Advocate had been in his seat, we were right in thinking that legal knowledge was required.
It was completely unfair, therefore, to put into the hands of a new Joint Under-Secretary, with all the various departments which he is trying to get to know, something which needs legal explanation. I know, because I have had experience as an Under-Secretary.

He has dealt with the matter as far as he is capable of doing, but we are not satisfied and I leave it to my hon. Friend to decide what to do.

11.13 p.m.

Mr. William Ross: I had intended not to participate but to leave it to the more learned of my colleagues to try to persuade the Government to give a satisfactory explanation of the changes being made. I thought that the Joint Under-Secretary of State was doing very well until he started to explain what the thing really meant, and then he displayed a considerable amount of weakness. Fair enough; I do not blame him at all.
We are asking him to deal with hypothetical cases, but the point is, surely, that the Government must have had something in mind, something with which they could persuade the House, if this matter was questioned, as it has been, as to the justice of what they were doing. With all due respect to the Joint Under-Secretary of State, it does state that
… there may, in addition to the resources of the juvenile, be taken into account the disposable income and disposable capital of such other person or persons …
This is the point. Is it fair that the House of Commons, having examined this, and not having had a satisfactory answer, should allow it to go? This might well be doing an injustice to someone.
If the Board is not seized of the dangers and difficulties of this, there may well be injustice. We have with us the Lord Advocate. I know that he has had a hard day. He had a pretty tough time in the Scottish Grand Committee, but perhaps it would be out of order to refer to that. I think that the Lord Advocate owes it to the House to give us his views about this and tell us clearly why this change has been made, what the change means, what are the limits of the change, and why it was made permissive rather than mandatory.
I think we should insist that, instead of the Joint Under-Secretary of Scotland having a third or fourth go at this, we should have the views of Scotland's legal adviser. The Lord Advocate is not only a Government officer. He advises us on the state of the law in relation to Scotland. He is there for the benefit


of the House. It is as such that I call on him to give us the advantage of his counsel in this matter.

Mr. Speaker: The Question is—

Mr. Willis: On a point of order, Mr. Speaker. May I respectfully draw your attention to the fact that as you rose to put the Question you were looking at the Order Paper and the Joint Under-Secretary of State for Scotland also rose to reply to the questions which were put to him.

Mr. Speaker: I understood from the words of the hon. Member for Kilmarnock (Mr. Ross) that no further leave would be given to the Joint Under-Secretary of State for Scotland to reply to the questions which were asked. I will allow an opportunity to see if it is the wish of the House that he should speak again.

Mr. Brooman-White: If hon. Members give me leave, I will make one brief comment. I accept the hon. Lady's backhanded compliment that I have given as good an explanation as I could. In fairness to my right hon. and learned Friend, as this is entirely administrative, responsibility for it rests on me and not on my right hon. and learned Friend the Lord Advocate.
The explanation is parallel to that given at considerable length by my right hon. and learned Friend the Solicitor-General about the English Regulations.

Mr. Willis: It was not a satisfactory explanation.

Mr. Brooman-White: I have amplified the position and hope that the House is satisfied with the explanation.

Question put and negatived.

Orders of the Day — FLOOD PREVENTION AND RELIEF

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.18 p.m.

Mr. Barnett Janner: Originally I gave notice that I would seek an early opportunity to raise the question of national responsibility for flood damage because I was very disturbed at the failure of the Government adequately to deal with the problem and, in view of the time they have had to consider the matter, to come to any decisions. Several weeks ago when I raised this matter disastrous inundation of land and buildings in many parts of the land had already taken place, and today my worst fears have been all too abundantly justified by recent events.
What possible excuse can there be for a delay of some eight to ten years in coming to grips with a question of such significance? At least 40 counties have been affected by the catastrophic floods of the last few days. Many millions of pounds worth of damage has been done to property and chattels. Lives have been endangered, and in some cases—fortunately only a few—lives have been lost. I agree that some steps were taken to deal with emergencies which might arise, but their ineffectiveness adequately to cope with contingencies that were foreseeable has been now clearly demonstrated.
In some districts in South Wales which I know so well the accounts and photographs of the havoc done depict a heartbreaking situation. I am referring only to South Wales which I know very well. I know, of course, that the same thing prevails in many other parts of the country. We are told, for example, that thousands of homes in Cardiff were swamped and that flood damage in the Treforest Trading Estate runs into many millions of pounds. This follows the pattern in so many other places nearby. The homes of more than a thousand people in the Rhondda had to be evacuated. These homes in some cases have been the tragic scenes of lives stricken by injury or disease resulting from service given to the nation in extracting coal from the bowels of the earth. For long periods this valley, in common with


other places in Wales, was visited by near-starvation When unemployment was rife, and now they have to suffer this new plague.
The important question which arises is whether the consequences of the heavy storms and flooding were avoidable. Surely they could have been anticipated and proper national plans made after eight or ten years to cope with the situation. Indeed, the Government themselves say that after eight years of delay they consider that the recommendations of the Heneage Committee should be partly implemented. They have brought in a Bill to that effect. In other words, what they are saying by that Bill is that there is a possibility of dealing with this position if it can be tackled in accordance with certain ideas which they are now bringing into force.
Am I right in saying that a grave responsibility rests on the Government for their failure to act before this new catastrophe overtook us? The House knows that if a private individual had been guilty of such negligence, knowing the possibility of danger, and had not fulfilled his duty by taking steps to prevent the consequences which might ensue to his fellow men, he would certainly be held to be guilty of an act of negligence. That act would have given rise to the right of action for damages. If, as often happens, he takes steps to remove the danger after the injury has been sustained, having known the possibility of damage beforehand, surely that is regarded as evidence against him. I see some learned Members present. [Interruption.] Well, some are learned in the general sense and some are learned in the particular sense.
I submit that the Government are in a similar position and should acknowledge their responsibility and pay damages accordingly. It is a matter of national concern and should not be allowed to rest mainly on the charitable disposition of individuals or on local government.
As I have already said, the introduction of the Bill to which I have referred indicates that the Government themselves believe that they have been negligent because they are now saying that they will be in a position to cope with this matter if the Bill is passed into law.
I have only time to refer briefly to several matters which, in my view, underline my contention. The Government knew or should have known of the dangers, and I should like to show that that is the position. On 23rd November, 1954, my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) asked the Chancellor of the Exchequer
whether he is aware of the periodic disasters which through the vagaries of the weather are causing distress and loss to country and town dwellers alike; and whether he is now prepared"—
this was in 1954—
to consider an insurance scheme to provide for immediate relief and ultimate compensation for victims of such calamities and not leave them to rely on the uncertain and unequal responses to public appeal; or if he will consider accepting Government responsibility.
The then Chancellor of the Exchequer, now Home Secretary, said:
I am obliged to the right hon. Gentleman for his suggestion, but I am satisfied that a Government insurance scheme would not be appropriate. The attitude of the House to the grave disasters—
they were not new, grave disasters; they were grave disasters in 1953—
which have from time to time afflicted the country is well known—
I ask the House to accept that it is negligence, because even at that time, the right hon. Gentleman said, it was well known—
but it would be a different matter to recognise in advance that a responsibility would rest on Her Majesty's Government whatever the scale or nature of the troubles might be.
My right hon. Friend the Member for East Stirlingshire then said:
Is the right hon. Gentleman aware that circumstances have changed, and that these days he himself collects about two-thirds of the profits of industry, so that many of the sources from which charity came are not so full as they used to be? If the Chancellor is going to collect large proportions of the profits of industry, should he not be prepared to accept some of the responsibilities that used to be accepted by people who gave money to charity? Is he not aware that damage to people's houses by some of these floods is just as serious as was war damage, and that the tragedy is just as serious for the people concerned, although it does not always arouse equal public sympathy?
The right hon. Gentleman's reply was:
In the end the State comes along and does its duty.
Hon. Members say "Hear, hear." I must be presenting my case badly if I


have not already convinced hon. Members opposite that there is a serious case here after eight or ten years against people who have not provided for the contingencies which have arisen. I will complete the then Chancellor's reply:
The difficulty of carrying out the right hon. Gentleman's suggestion is that we have to see so far ahead and over so very wide a realm, some of which is that of private insurance, whereas war damage lay in the realm of what I might call national insurance. That is why I cannot adopt the right hon. Gentleman's suggestion, though I see its value."—[OFFICIAL. REPORT, 23rd November, 1954; Vol. 533, c. 1030–31.]
That was many years ago. I could give many instances of where attention has been drawn to the serious consequences from that time onwards of this kind of flooding; but for want of time I shall deal with the position of the area in and around my constituency. I do not for one moment suggest that it is by any means the most serious.
I ask the House to consider this. On 25th January, widespread flooding throughout Leicestershire took place. The buildings flooded included a part of Loughborough College and a number of houses in south-west Leicester. Water up to two feet deep was reported on the Melton Road city boundary on 29th January, the Syston area being particularly hard hit. Floods at Quorn closed the main Loughborough-Leicester Road to all but the heaviest vehicles. In June and October emergency calls for firemen's pumping services were received from various parts of the county and consequent damage to property accrued, principally in the Syston area. Water was five feet deep at Rearsby. Last month, roads were also under water in Leicestershire through storms.
I could give further instances, but I do not want to detain the House longer than is necessary. I know that several other hon. Members wish to speak, but I have so much to say that it may not be possible for me to leave them sufficient time to do so.
Today, I quote from the Leicester Mercury of Monday, 5th December:
The worst floods for over thirty years"—
this is the kind of argument that the Government will use, because they happened to be the worst floods—
hit Leicester at the week-end. In many spots the fast-rising waters made it impossible for

road organisations to arrange traffic diversions. The River Eye at Melton rose by five feet and overflowed its banks in many places. So serious were the floods which rose after two inches of rain within 24 hours that Leicestershire police asked the B.B.C. to broadcast warning motorists to avoid the county. At one time all roads north of Leicester were blocked. Scores of houses in villages were flooded and their occupants stranded in their bedrooms. The torrential rain also turned roads and gardens into lakes in Leicester itself. For the third time within a few weeks houses at the Melton Road city boundary were hit.
All this happens at times of heavy rain. In the dry season many parts of the country suffer from drought to such an extent that there is a dangerous shortage of water. In my view, the answers given in the House yesterday by the Minister indicate that even now he has not realised the seriousness of the position, and the country is gravely disturbed.
First of all, I think that there should be a national scheme covering the question of flooding as well as that of the conservation of water. In my view, there should be a much more authoritative body set up than the one dealing with the problem of water conservation at the present time. I am glad to see that a representative of the Treasury is present, because I think that funds should be made available by the Government from the national Exchequer with which to compensate those who sustain losses as a consequence of floods. These funds should be made available to cover all losses, and the Government should make it abundantly clear what losses they are prepared to cover.
The Government should come forward speedily and should not delay. I am not in any sense deprecating the goodness of heart of those who contribute towards relief funds, but, as I have tried to point out, the fact of the matter is that if we had a nationally planned method for dealing with the position those who are suffering today would not have been placed in the situation in which they find themselves.
What is that position? Let me take the example of the small shopkeeper. Many small shopkeepers in Leicester and throughout the country have suffered flood damage. Does the small shopkeeper know at the present time that his stick will be replaced?

Mr. Dudley Williams: Yes.

Mr. Janner: I should like to hear the Minister say that, because it is important that we should know and that it should be made known throughout the country so as to relieve the anxiety of those who have suffered in this way. Help should be given promptly. Those affected should not have to rely on the charity of others. The Government should make it clear tonight—I hope that they will—that they are prepared to pay for the damage caused so that a man can reinstate himself in business and that they are prepared to replace furniture in flooded homes.
Many houses which were redecorated after recent floods are in need of being redecorated once more after the latest floods. The occupants of such houses want to know whether they will be given sufficient money with which to carry out those redecorations. Will there be provision for those houses which suffer damage which cannot be ascertained at present, in the same way as there was in the case of war damage?
These are matters I put to the Minister which I hope will be answered this evening. I know that I cannot deal with any question of legislation, but I hope the Government will say categorically that we shall have this fund. If certain individuals like to contribute to it, well and good, but we should not have to wait to see what others do. I hope the Government will create the fund and pay for all the damage sustained by those who have been victims of what I hope hon. Members will agree, has been an act of negligence on their part. It may be that in a year or two we will have satisfactory provisions under new Acts, but it is obvious that we have not got them now and that the Government know that we have not got them; otherwise they would not be bringing in new legislation. It is obvious that they will be able to do in future what they have not done in the past.

11.37 p.m.

Mr. Edward du Cann: I am very glad to have this extremely short opportunity to speak, as we have not much time. I am grateful to my hon. Friend the Financial Secretary for giving me the opportunity to take part in the debate.
This is not a party matter, and I do not think it should be treated as such.

All of us are most anxious to do what we can for those who have suffered, especially those of us who have constituency interests. I know the sincerity with which the hon. Member for Leicester, North-West (Mr. Janner) has spoken, but for my part I think we have had some first-class statements from the Minister of Housing and Local Government and the Parliamentary Secretary. I can say on behalf of my constituents who have suffered so much in the flooding in my constituency that they are satisfied with the assurance the Government have given. I have talked with them and I know that to be true.
Between 9 o'clock on Saturday morning and 9 o'clock on Sunday morning 4½ inches of rain fell on Exmoor. That is not something the Government can cope with; it was an act of God.

Mr. Janner: rose—

Mr. du Cann: I am sorry, I cannot give way, as there is not much time. I agree with the hon. Member that this is something for which the community as a whole should accept responsibility, but I wish to refute the idea that the flooding was caused by the Government being lax. The Government have to accept responsibility for doing two things, first helping immediately our fellow citizens in distress. In the Dulverton area our general relief fund amounts to about £400 and I think that about £4,000 should be spent. I hope this help in the terms of the promise made by the Parliamentary Secretary will be given immediately.
Secondly, the Government have responsibility to make money available to mitigate, so to speak, the possibility of further floods. Exmoor is like a sponge and is saturated with four or five inches of snow on the hills. We are desperately anxious that money should be spent in clearing the culverts to prevent further flooding. This is something to be done immediately and I hope my hon. Friend, who is well known in Taunton as a man of wise judgment and humanity, will be able to help us.

11.39 p.m.

Mr. George Thomas: I am also grateful to the Financial Secretary for allowing me to make a brief intervention, and I am grateful to my hon. Friend the Member for


Leicester, North-West (Mr. Janner) for initiating this debate.
Those of us who come from South Wales also during the week-end have been hit by the disaster of the floods which caused chaos among our people. My hon. Friends for the Rhondda, the hon. Member for Rhondda, West (Mr. Iorwerth Thomas) and the hon. Member for Rhondda, East (Mr. G. Elfed Davies) and the hon. Member for Cardiff, North (Mr. W. Box) are disturbed and want to know what steps the Government are taking to give immediate help to local authorities to try to prevent any further occurrence of flooding by high tides which are due later this month. If we have heavy rain it is almost bound to bring further disaster. We know that towards the end of December there will be exceptionally high tides again. If this wet weather continues it is an appalling thought that our people will have to spend night after night in anxiety.
We in the House must provide local authorities with the means to do the job. Possibly the Minister can give me an assurance on this question. We must give them the all-clear and let them know that any backing which they require will be forthcoming.
I am also concerned about the fact that so many people have to go to the Assistance Board for help. I know that that is the normal channel for people in need, but I should be grateful if the Minister would indicate what means of compensation or help will be available for those who have been afflicted in this way.

11.41 p.m.

The Financial Secretary to the Treasury (Sir Edward Boyle): I have not much to add tonight to the comprehensive statement made on this subject on 11th November by the Parliamentary Secretary to the Ministry of Housing and Local Government, but I will answer one or two points made in the debate.
I must first supplement one point made by the hon. Member for Leicester, North-West (Mr. Janner) who spoke as though the Land Drainage Bill now going through the House were the first instance of the Government taking notice of this problem. One statistic which it is important to remember concerns capital expenditure on land drainage,

both by river and catchment boards and by internal drainage boards; for this has been rising substantially during the last few years. I have looked at the figures for the financial year 1956–57, when I was last in the Treasury, and the total capital investment for this purpose was then about £4,300,000. In the forthcoming financial year—the figures were given in the recent White Paper on Capital Investment—the total capital expenditure on land drainage will be over 150 per cent. of that figure, and grant payments have risen in proportion.
I assure the hon. Member that in recent years we have devoted considerably increased resources to land drainage generally and that when we are planning the future public capital investment programme we shall take into account the flood disasters of this year. It is not fair to suggest that only now are we taking note of this problem.

Mr. Janner: I did not suggest that nothing had been done. My concern is that we are now devoting capital expenditure which should have been devoted before and which might have prevented what is now happening.

Sir E. Boyle: The trend of increased capital expenditure has bean steady throughout the last four or five years.
It is fair to say that following the flood disasters the combined resources of the Department and local authorities have produced a quick response in most cases—nearly all cases of need. I am told that in virtually all badly affected areas relief funds have been set up, subscriptions have been received and payments are already being made The funds have received a guarantee of support from the Government. The process of assessing the full extent of the damage is bound to take some time, but it is well under way.
In reply to the hon. Member for Cardiff, West (Mr. G. Thomas), I must make it clear that the Ministry of Housing and Local Government will make contributions to local funds set up for the purpose of collecting voluntary contributions for the relief of distress in all those cases where the extent of loss is greater than the total voluntary contributions. The money will be accounted for on the main Vote of the Ministry of Housing and Local Government, where it will be shown as a grant-in-aid.


Parliament will be asked to sanction this expenditure by means of a supplementary Estimate, to be presented in due course. In the meantime, the money will be advanced from the Civil Contingencies Fund.

Mr. Iorwerth Thomas: Will the Financial Secretary state what will be the position in the Rhondda Valley, where it has been decided not to set up an appeal fund? Our dilemma is that there will be several appeal funds; for example, Cardiff and Welshpool will have appeal funds. It is difficult to know where to stop. In the Rhondda Valley it has been decided to levy a rate of 2s. 6d. in the £. What contribution will the Ministry make towards that fund?

Sir E. Boyle: I cannot answer that question straight away, but I am obliged to the hon. Member for raising the point and I will discuss it as soon as I can with my right hon. Friend the Minister for Welsh Affairs and write to the hon. Member. The point I wanted to make is that to those who talk about the Government subscribing £ for £ the simplest objection, I think, is that in many cases that would not be sufficiently generous. I hope that the guarantee that I have announced tonight will be regarded by the House as satisfactory.
The hon. Member for Leicester, North-West referred to the possibility of some kind of insurance scheme. We have looked into this again and again. One thing which bothers me about it is that, if people are compelled to contribute via some kind of levy to an insurance scheme against national disasters, that may very well have some effect on the scale of voluntary contributions. We shall look at it again, but my own belief is that the way we have been tackling the matter is the right one.
In the last minute or two, I want to say only this. We in the Treasury and in all the Departments concerned will, of course, learn all possible lessons from these flood disasters for the future. Although the weather has been quite freak, none the less we want to make sure that our arrangements are right. I can assure the House about one thing I have looked into. Whenever the planning authorities consider questions of where houses should be built,

the attitude of the river board is always taken into account. I therefore hope that we shall not often again have cases of houses being sited in places where flooding is particularly likely.
We shall, of course, consider all aspects for the future. All I ask the House to accept tonight is that we have in recent years, I believe, done more than is always realised in the way of providing increased capital expenditure for drainage, and I believe that we are dealing with this matter of relief along the right lines.

Mr. G. Elfed Davies: Will the Minister reply to a question which gives me great concern? There are areas where the problem of flooding will disappear ultimately when the water goes down, but in my constituency there are areas where the problem will still remain. The houses have been evacuated, but the danger still exists. What are the Government prepared to do to assist those people?

Sir E. Boyle: I can only repeat what I said just now, although I see the point which the hon. Gentleman makes. In the future, the river boards view about building in an area of potential flood danger will always be taken seriously by the planning authority. As regards any existing problem, perhaps the hon. Gentleman would care to write to me or to the Minister of Housing and Local Government. We will certainly look into it.

Mr. Janner: Will the Minister answer another of the points I raised, which has been raised many times in the House? What plans have the Government in mind with regard to combining efforts in tackling the two problems here, one of flooding and the other of water conservation against drought? What is happening about that? It is a very serious matter.

Sir E. Boyle: I think that this is really something which—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twelve minutes to Twelve o'clock.